Most of us could not have predicted the events of 2020. Covid-19 and the pandemic made and continues to make its mark on the world, Canada and our communities. The real estate market throughout North America, after an initial shutdown, came roaring back to record-breaking growth and sales. We seem to have avoided a major recession, but we cannot ignore what just happened.
With much economic uncertainty associated with Covid-19, forecasting real estate trends for the upcoming year and years requires a deep dive into statistics. Our expectation is that Covid-19, as we know it now, will have less of an impact moving forward towards the end of this year. However, there is no sense of what the long-term effects will be or what the future will look like. My thoughts provide real estate tends with a specific focus on “opportunities,” but not everyone agrees on the merits of a niche-focused strategy.
From office towers and shopping, much of our economy in Toronto was built throughout the 20th century on a model of the large urban centre. The COVID crisis decimated this idea, at least for a time, allowing us to work, shop, watch and learn from anywhere. The resilient Toronto economy will continue to blend past and present, physical and digital, further dispersing economic activity and potentially ushering in a new era of decentralization into the suburbs.
The Toronto market, along with every other market in 2020, had a tumultuous year. After a relatively steady 2019, the market was primed for a speed up in spring, but the lockdown that started in mid-March put an abrupt hold on that prospect. Luckily, this pause was only temporary, and buyers returned to the market again in May and June. By the fall, Toronto was demonstrating seller’s market conditions, with fewer listings than demanded from buyers and low interest rates resulting in even more buyers.
During the first major lockdown, Torontonians began weighing their housing options. The lure of more yard space, proximity to parks, lakes, rivers and other green spaces called strongly to those of us stuck working at home. The pandemic accelerated the shift out of the Core of many of our cities – at least for now.
Surveys show that 32% of Canadians no longer want to live in large urban centres, with many hoping to move to the suburbs or more rural areas. But despite this change in attitudes, the Toronto market continued to stay hot throughout 2020 after its initial and brief dip in March. Despite these unprecedented and uncertain market conditions, the Toronto residential real estate market ended 2020 on a high, with 95,151 home sales taking place throughout the year. This was an 8% increase YOY and the third best year on record for sales. New listing couldn’t quite keep up, with a mere 3% increase YOY, and likely helped push up the average home price across the Toronto Region by 13% annually to a new annual record of $929,699.
The rental market in Toronto took a hit from the loss of immigration, the curbing of the influx of students due to virtual learning taking precedent, as well as the persisting results of new regulations on Airbnb properties. With one-bedroom units down 17% in October 2020 compared to a year before, the Toronto rental market continues into 2021 on the same path.