Despite the pandemic’s blow to the region’s economy in 2020, average home prices in the GTA hit a record high, while sales were up more than 8% year-over-year, indicating that the region's real estate market more than managed to weather the COVID-19 storm.

That average 2020 selling price? A new record high of $929,699, up 13.5% from 2019's $819,279, according to the Toronto Regional Real Estate Board (TRREB).

The 13.5% increase over 2019’s average was led by single-family homes, where limited supply helped drive prices, with 905 areas outside of Toronto experiencing the most pronounced price and sales gains in that sector.

The real estate board said there were 95,151 home sales in the region last year, up 8.4% from 2019 when 87,751 transactions were recorded -- making 2020 the third-best year on record for GTA home sales.

Last year's growth was further fuelled by a hot December, which is traditionally one of the slower periods in the real estate business. Last month, there was a record 7,180 sales -- a year-over-year increase of 64.5%.

READ: December Caps Off 2020 as Third Best Year on Record for GTA Home Sales

Despite a "steep" drop-off in activity in the spring during the first pandemic lockdown, home sales “roared back to record levels throughout the summer and fall,” said TRREB president Lisa Patel, who added that low borrowing costs and a strong economic rebound helped fuel the property market.

Cam Forbes, General Manager/Broker, RE/MAX Realtron Realty Inc., says there are two sides to the COVID-19 pandemic for the real estate market.

"It initially introduced uncertainty, particularly in March-June -- there were many unknowns, and uncertainty is never a good thing for the real estate market," explained Forbes.

He added that the other side is that, "COVID-19 has both decreased interest rates to historic lows and you can get a five year fixed mortgage for 1.6% (was about 2.8% this time last year) -- and flexibility for buyers that have jobs, but that no longer have to work from offices downtown. This means that a whole new market to purchase opened up, that is also more affordable (the outer 905 and beyond)."

According to TRREB, COVID-19 did have an impact on the type of properties that were in demand last year with condo sales trailing the single-family home market that includes detached, semi-detached, and townhouses.

“The supply of single-family homes remained constrained resulting in strong competition between buyers and double-digit price increases," said TRREB chief market analyst Jason Mercer. "In contrast, growth in condo listings far-outstripped growth in sales. Increased choice for condo buyers ultimately led to more bargaining power and a year-over-year dip in average condo selling prices during the last few months of the year,” said Mercer.

Last year's data revealed that detached home prices rose 15% year-over-year in the 905 areas outside of Toronto in 2020 to an average of $1.06 million, while in Toronto, detached home prices saw a 12.1% increase to an average of $1.48 million.

When reflecting on 2020, Forbes says historically low-interest rates helped improve affordability for buyers, while the work from home ability increased options for purchases in more affordable markets (outside 905 and beyond), bringing new activity levels to these regions.

"The uncertainty of April and May is now less uncertain, as we know so much more about COVID-19 and with a vaccine being implemented, should continue to decrease," Forbes told Toronto Storeys.

He added that the market overall was a seller's market in 2020, and still is, with only 1.1 months of inventory (MOI = at current demand, if no new homes were listed for sale, the market would be out of homes available for sale in 1.1 months).

"Softness in the downtown rental market and condo market, due to less immigration, no Airbnb activity, and the ability for some to no longer work downtown, was a pronounced theme in 2020, whereas 2019 essentially saw the opposite," added Forbes.

Looking to the new year, Forbes says in 2021 softness in the rental market will also be a short term factor that represents an opportunity for buyers that want to live downtown long term, as prices are still competitive from 2020, which will mitigate downward pressures in these markets.