Monthly sales in and around the Toronto real estate market continue on an upward trajectory. And that’s despite concerns about the impact of COVID-19. After the months of self-isolation during the spring, there was pent-up demand, and that’s apparent by looking at the numbers.
The Toronto Regional Real Estate Board reported 10,775 sales for August, a record-setting 40.3 per cent increase over August 2019. Sales are up for all home categories all around the Toronto region.
The market driver was the low-rise segment, with condo sales slowing down. Low-rise includes detached and semi-detached houses, and townhouses. Low-cost borrowing, monthly GDP growth and job creation numbers were the main reasons behind the growth. Pent-up demand, founded on a growing desire for the perceived stability in owning real estate, compared to the instability of the stock market as COVID-19 winds blow, are seen as other factors.
The overall average selling price around the Greater Toronto Area was up 20.1 per cent to $951,404 in August compared to August 2019.
Demand for home ownership rises
In the low-rise segment, detached home sales saw an increase of 50.6 per cent over August 2019 (65.3 per cent in Toronto). Semi-detached sales were up 66.8 per cent (81.2 per cent in Toronto). And townhomes increased 45.8 per cent (43.3 per cent in Toronto). Condo sales for the Toronto region were up only 10.9 percent.
Look for the trend where people pack up and move to the suburbs to continue. That’s because more people will likely want to work from home. Offices will continue to close, amid concerns about the pandemic. Buying in the suburbs is likely here to stay.
Menkes development, Church and Shuter
Average pricing per category tells a clearer story of what is going on across the Toronto real estate market, and the region. Detached homes led the way at $1,172,880, a 19.9 per cent year-to-year increase. Semi-detached were next ($905,712, up 18 per cent). Townhouses followed that ($742,517, 16.1 per cent). Condos? Prices there averaged $629,643, up 9.5 per cent. Like we said, an increase, but nothing to get too excited about. Some think that as people get used to a longer-term, pandemic lifestyle, those numbers could improve.
Right now, downtown condos lean more towards a buyers market. Agents on the front lines will tell you smaller space in condos, elevator waits and closed amenities due to the pandemic are all factors there. Condo prices might not be where they used to be, but they are still selling (in some cases because they were sold pre-pandemic).
The average price increases for single detached and semi-attached homes in Toronto (416 area code) year over year were really robust – 21.4 per cent and 21.9 per cent, respectively. Condos were at 8.7 per cent. The average price for a single detached home in Toronto was just over $1.5 million.
Bottom line? As we enter Phase 3 of the re-opening and the economic recovery continues to take hold, the Fall Forecast for the Toronto real estate market and around the region remains optimistic. Housing inventory sits at just 1.5 months, with 2.8 months of inventory for the condo market (again, condos are lagging). The number of condos outpaced all other housing segments when looking at new listing figures.
Pent-up demand and a smaller inventory, coupled with the heightened desire for real estate (cottages are a whole other success story) should lead to a continued steady market. Of course, that’s barring any drastic changes with the banks, economy or second-pandemic-wave shut downs. Provided the economic recovery continues apace, it looks to be a very busy Fall indeed.