Despite COVID-19 lockdowns and job losses, The Toronto Regional Real Estate Board (TRREB) says strong demand for higher-priced homes will push the average selling price in the Greater Toronto Area (GTA) above $1 million for the first-time.
“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, in a release.
“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.”
The average price moved closer to the million dollar mark in TRREB’s latest monthly report. It rose 15 per cent year-over-year to $967,885.
Along with rock-bottom interest rates and a desire for more space, a lack of inventory continues to be one of the key drivers for higher prices. New listings were up, but not by the same annual rate as sales.
Detached homes continued to lead the way with a 31.2 per cent average selling price increase. The 905 area code region was up 36.6 per cent compared to 31.2 per cent in the 416. But sales for detached homes were up the least, at 34.4 per cent.
Why lower condo prices might not last
Condo apartments led the way with an 85.5 per cent jump in sales growth, but downtown prices are still down compared to last year.
“Overall condo values in Toronto are actually up year-over-year. But it’s the downtown core that still remains down, dropping 5 per cent over the past 12 months — with inventory more than triple that of the previous year,” Robert Van Rhijn, broker of Record at Strata.ca, told Yahoo Finance Canada.
Van Rhijn says he doesn’t expect prices to remain depressed. “In the last 2 months alone, we’ve actually seen an increase of 5 per cent in downtown condo values. If that trend continues for another 2.5 months, we’ll be in the positive year-over-year. And don’t forget, we’ve got the spring market coming, which traditionally favours sellers,” he said.
Rising condo sales over the past couple of months suggest buyers waiting for lower prices are throwing in the towel.
“Many people have been waiting for the market to tank. But we’re already realizing it’s not going to happen,” said Van Rhijn.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.