One of the most perplexing effects of the COVID-19 pandemic has been its impact on the Canadian housing market. Generally the rule of thumb has been that crises cause a near universal drop in housing prices, typically caused by people being unwilling (or unable) to make major purchases when times are so uncertain. However, since the emergence of COVID-19 in Canada early in 2020, home prices have continued to rise steadily.
In fact, according to the Toronto Regional Real Estate Board (TRREB) annual forecast published last month, Toronto real estate prices are on track to exceed an average of $1 million for the first time ever by the end of 2021. This comes after the real estate market in Toronto had something of a rocky start to 2020, but quickly rebounded to new heights in the second half of the year, leading to an average home price of $929,699 with 95,151 total home sales by the end of December 2020. Pandemic or not, the outlook for Toronto real estate continues to be strong.
How COVID-19 affected the Toronto real estate market
The steady rise in sale prices and home sales in Toronto has come as a shock to many experts who assumed the pandemic would negatively affect the market. Instead, its resilience allowed Toronto real estate to bounce back in a big way. This is thought to have been at least partially sparked by the new realities of the modern workplace – rather than report to a towering office building where the threat of virus transmission looms, millions are working from home and spending more time around the home.
It turns out that being locked inside your home for months at a time can make you reconsider things – is the kitchen big enough? Do we have enough space? Are we living in the right area? Can I easily find space for a home office? These are just some of the questions Toronto homeowners were suddenly asking themselves in the early days of the pandemic, leading to many desiring change. The workplace and homebody factor, coupled with record low interest rates, has resulted in real estate becoming a much more attractive prospect for potential buyers.
TRREB: Home ownership, demand for rentals will remain strong in 2021
Even with the pandemic still affecting the province, the outlook for 2021 remains extremely positive according to the annual report. TRREB reported that they expect up to 110,000 home sales over the next year, and for the average home sale price to eclipse $1 million for the first time ever. These findings clearly show that the pandemic has not stopped Torontorians from purchasing homes, nor has it managed to slow down the Toronto real estate market. Toronto home buyers can continue to expect the same competitive nature observed by the market over the last year.
The rental market, too, has been on fire since the early days of the pandemic. Demand for rental accommodation remained strong throughout the year, leading to the rental market becoming similarly competitive. The only area that has not benefited from the post-COVID-19 real estate marketing boost is that of condos. An increased supply of condominiums for rent was observed, leading to increased negotiating powers for renters and lowered rents. TRREB reports that it is confident, however, that the demand for rental units in the Greater Toronto Area will continue to be strong and may even see acceleration.
The TRREB report is big news for current and prospective Toronto real estate investors, signalling that the time to get in is now. Waiting for the “right opportunity” will only result in homebuyers paying more for properties, having less choice, and being forced to enter into bidding wars. Entering the market now means endless opportunities in the Toronto real estate market – steadily rising home prices and a red hot rental market mean the sky’s the limit.
If you’re a current or prospective real estate investor faced with the daunting task of managing a rental property, HighGate Properties is here for you. We offer a range of Toronto property management services all across the GTHA, handling things like tenant screening, inspections, renovations, upgrades, and tenant communication so that you can enjoy a worry-free investment experience and have more time for the things that mean the most to you. To find out more about the many advantages of the property management services offered by HighGate, get in touch with a member of our team today.