Nikki Hessami is all about the numbers.
The sales representative for Home Leader Realty Inc. isn't hanging her trust on opinion or a point-of-view, only what the market data is telling her. She chooses not to operate in grey areas or places of ambiguity; if the data doesn't support it, she doesn’t present it as fact.
These values are a refreshing change in a world where fake news runs rampant and the usual prognosticators and so-called experts can often be found talking out of both sides of their mouth. This is why Hessami -- a new, fresh-faced presence in the Toronto real estate scene who lets the evidence speak for itself – is the perfect person to answer this week’s question.
What do you think is in store for the Toronto real estate market in 2021?
Nobody is a fortune teller. Nobody has a crystal ball. However, I am a person who has looked at the market data and the numbers because people can say whatever they want, but these numbers never lie.
I always monitor the Toronto market analysis that comes out every month and recently it has shown that even during the pandemic and even during the lockdowns, the market in Toronto has proven to be very resilient. For example, in October 2020 compared to October 2019 the Toronto market appreciated by 25% in terms of total residential transactions. That’s a big number, and it's very surprising.
Obviously, the lifestyle of Torontonians has changed during the pandemic. Lots of people want to move to the suburban areas of the GTA because they’re working from home, they're locked down and they need more space (and bigger spaces). As so many people want to change locations right now, we're seeing the housing market appreciate a lot in recent months. This is especially true in suburban areas. I have a client right now who’s looking to buy a detached house in Barrie for the simple reason that he can’t afford to buy in Toronto. Typically, for detached homes in Barrie right now, it’s not uncommon to receive 20 to 30 offers on one property with bids ranging from $70,000 to $120,000 over asking.
In comparison with houses, the Toronto condo market isn’t as hot, but total condo apartment sales have gone up 10.5 percent year-over-year and the average price for condos in the third quarter of 2020 was up 8.3% over the third quarter of 2019.
Meanwhile, the Federal Government of Canada has set an immigration target of 400,000 people for each of the next three years. This could mean up to 1.2 million new immigrants in just the next 36 months, and 34% of them will be coming to Toronto. This level of immigration shows us that over the next three years demand for housing will still be very high. In just the last year alone, from October 2019 to October 2020, the average selling price of a GTA home as risen to $968,000 (+13.7%).
All the above data clearly shows that home prices, selling prices, and demand will continue to go up in the Toronto market in 2021.
Overall, Toronto real estate prices will be going up for years. The market may experience temporary fluctuations in that trajectory, but real estate is a long-term investment and, in the long-run, home prices in Toronto will go higher and higher and never stop in this city.
In 2008, the average home price was only $379,000, in 2019, the average home price was $851,000 and in 2020 it’s $958,000. Every ten years, real estate in Toronto booms and it has been going up over these past 10 years because of immigration, attractive jobs, and the fact that Toronto is a world class city akin to London, Tokyo, New York, or Paris. Big companies like Google are in Toronto and lots of people want to be close to these places for employment. Bottom line, the Toronto real estate market will stay strong and become even stronger in 2021.
I also believe a lack of housing supply hitting the market will continue to challenge home buyers and put upward pressure on prices in 2021. Concurrently, interest rates will remain low for the next few years and property taxes will stay the same for 2021. Support for the real estate market from the Canadian government will continue to play a role as well. Developers are getting great incentives from the feds to keep building and that keeps the market very high as well.
Obviously, I’m pretty positive about the Toronto real estate market and my advice would be to take advantage of where prices are now because once the pandemic ends, lots of people with money will come back to the market and prices will go through the roof. Now, is the best time to use the pandemic as an opportunity because Toronto real estate is never going to be cheaper.
This interview has been shortened for both clarity and length.
Please note: The opinions in this article are those of the interviewee and not those of Toronto Storeys. When considering real estate advice speak with your own agent and lawyer.