Following a year like no other, the Greater Toronto Area (GTA) housing market is poised to have a strong, record-setting 2021, with the overall average price for all home types on track to eclipse the $1 million mark for the first time.
The report comes on the heels of an unprecedented year of real estate, which started off strong leading up to the pandemic before seeing historically-low market activity amid the province-wide lockdown in the spring. However, this was short-lived as consumer confidence returned and the market rebounded in the latter half of the year, showing the resiliency of the GTA market.
For 2020 as a whole, 95,151 sales were recorded, an 8.4% year-over-year increase, while new listings were up 2.6%. It was this disconnect between sales and new listings that accelerated the growth of average home prices, which increased 13.5% in 2020 to $929,699.
“The pandemic certainly resulted in an unprecedented year for real estate in 2020, but it hasn’t put a damper on the overall demand,” said Jason Mercer, TRREB Chief Market Analyst.
“Looking ahead, a strengthening economy and renewed GTA population growth following widespread vaccinations will support the continued demand for both ownership and rental housing. But over the long run, the supply of listings will remain an issue, particularly in low-rise segments.”
With 2021 underway, TRREB's Market Outlook paints an optimistic picture of what's to come, with the desire to own a home remaining strong.
Total home sales are expected to reach a near-record of 105,000, with the strong sales growth supported by continued economic recovery, including jobs and record-low borrowing costs.
In tandem, the overall average selling price for all home types and areas combined will eclipse the $1,000,000 mark for the first time, reaching $1,025,000, representing a year-over-year increase of 10%.
TRREB has also forecast the pace of new condominium apartment listings will start to recede, especially in the second half of the year. This comes after the number of listings in the GTA were down 4.3% year-over-year in 2020, compared to an increase of 15.8% in Toronto, while overall sales in the 416-area were down 1.1% year-over-year and the GTA saw sales increase 14%.
With low-rise listings such as single-family homes remaining constrained, TRREB expects total new listings will reach the 160,000 mark in 2021, up from 156,755 last year. Subsequently, market conditions for low-rise homes, including detached houses, will remain very tight, with sales rising at a faster pace than listings in 2021.
While mortgage deferrals were initially a concern early on in the pandemic, TRREB says Mortgage Professionals Canada does not anticipate any pronounced uptick in mortgage delinquencies that would create concerns in 2021. Most property owners who took advantage of mortgage deferrals did so out of an abundance of caution rather than a financial necessity, and therefore have resumed their regular payments.
As such, TRREB says negotiated mortgage rates will remain low throughout 2021, though it is possible that medium and longer-term fixed rates could start to edge up in the latter portion of the year as economic recovery takes hold.
Looking ahead, TRREB says the key challenge to the housing market will be a familiar one: supply. Though, policymakers at all levels of government have acknowledged the need for a greater supply and more diverse housing types.
To tackle this issue, Toronto Mayor John Tory says the city has the goal of building 40,000 affordable housing units, including 18,000 supportive homes, 1,000 of which will be modular homes.