Despite being amid a pandemic, the Toronto real estate market bounced and came back strong as home sales in the Greater Toronto Area increased by 40.3% in August compared to August of last year. In the report from the Toronto Regional Real Estate Board, the average price also increased, from $792,134 to $951,404. About 50% more detached homes, 66.8% more semi-detached homes, and 45.8% more townhouses were sold, too. All these were happening as Toronto experienced an 11.5% decline in employment growth.
Contributing Factors
For one, the pandemic itself is a major factor why home sales increased. Because of COVID-19, fewer people left their houses and became active in the market around the GTA. The GTA resale market became competitive, especially for low-rise home properties. It should also be noted that the trend of moving away from the busy city to the suburbs is slowly getting traction, also due to the new work arrangements brought by the pandemic.
Canada also managed to keep its economy afloat, by creating more jobs and increasing the average hourly wage. Low borrowing costs make consumers confident in purchasing houses, with the Bank of Canada slashing its interest rate by 0.25% and no rate hike for the next 3 years so. With consumers having a stronger buying power, the demand for properties rose because of the want to move away from the crowds of the city.
As the people’s demand gradually overwhelm the market’s supply, the law of supply and demand states that the prices would eventually go up. This situation is brought about by all these factors, making Toronto a hyperactive marketplace for homes.
Prospects for the Condo Market
The demand for larger properties indeed increased the pricing of these types of dwellings, and as long as this demand is not met, this rise will continue. This makes it hard for new homeowners to get into the market. However, because of this turn of events, the condo market’s future is looking bright and healthy, making it a considerable alternative.
Condos did experience a sales increase, but only a measly 10.9%. This means that the supply of condominiums will tip on the opposite scale as the supply of other properties, consequently lowering their prices. If the current trend continues, the condo market might become a buyer’s market this fall.
If you’re interested in entering the condo market, now can be a good time to start looking around, as prices are getting cheaper and agencies like Condo Mapper International are available to help you.
Conclusion
The pandemic has caused big shifts not just in the economy but in the living arrangements of most people. Because of this, the Toronto real estate market is experiencing demand levels that it cannot meet for the time being. Larger properties and residential areas in the suburbs are slowly becoming hotpots for home purchases. However, this tipped the scales favorably for the condo market, which should experience a supply surge and perhaps eventually a buyer’s market situation.