Home Prices in Toronto Expected to Hit Average of $900K in 2020: Report
On Thursday, the Toronto Regional Real Estate Board’s fifth-annual Market Year in Review & Outlook Report titled The Time is Now was released.
One of the big takeaways is that TRREB’s forecast is calling for strong growth in home sales and selling prices, while the housing supply of listings is expected to be flat-to-down in 2020.
“We currently have infrastructure that does not appear to be keeping pace with the large number of people attracted to this region,” says John DiMichele CEO, Toronto Regional Real Estate Board.
“It seems like we’ve been talking about the housing supply issue for quite some time. Although there is encouraging news and steps coming from various levels of government, the time is now to start making real efforts to bring in more supply and a greater diversity in housing types.”
According to the report, in 2019, home sales continued to grow in the GTA, with 87,825 sales reported, an impressive 12.6% increase compared to 2018. TRREB says the strong sales result were due to a decline in negotiated fixed mortgage rates and positive labour market conditions.
However, the number of new listings last year dropped 2.4%, which resulted in increased competition between buyers and accelerated price growth, with the average pricing climbing 4% to $819,319 for all home types combined.
Looking to 2020, TRREB expects homeownership demand to remain strong as existing residents and newcomers alike will continue to view the purchase of a home as a quality long-term investment.
However, the report states that in many GTA neighbourhoods, home buyers will be faced with a constrained supply of listings, meaning buyer competition will remain strong and above-inflation price increases will be the norm in most market segments.
A notable takeaway is that home sales are expected to hit the 90,000 mark in 2020–up by almost 10.5% compared to 87,825 sales reported in 2019. Sales growth will be driven by the higher density low-rise market segments (semi-detached houses and townhouses) and the condominium apartment segment.
“The bottom line is that new listings will not keep up with sales growth in 2020,” reads the report. “The end result will be an acceleration in price growth over the next year, as an increasing number of home buyers compete for a pool of listings that could be the same size or smaller than in 2019.”
Also worth highlighting is that experts predict the average price of Toronto-area homes is expected to rise nearly 10% in 2020 to $900,000, up from last year’s average of $819,319. TRREB says this rate of growth indicates price growth will continue to be driven by the less expensive mid-density, low-rise home types and condominium apartments.
However, if the pace of detached home price growth starts to catch up to that of other major home types, the average selling price for all home types combined could push well past the $900,000 mark over the next year.
You can read the full report here.