To say that 2020 has been an unpredictable year is certainly an understatement. By the second week of March, any economists’ predictions about what should have happened in the real estate market were thrown out the window. And the uncertainty that we’ve experienced over the past nine months has been daunting, to say the least.
But as 2021 draws closer, we realize that a new reality is dawning. Hopes that a COVID-19 vaccine will soon be available have brought optimism to the markets. But the pandemic has also changed the way we live, work, and play. Many companies have transitioned their employees to working from home and it is likely that some will never go back. This gives people more options than ever before about where and how they would like to live. And that has the potential to profoundly affect the real estate market.
Residential real estate
There has been concern expressed by some that the Toronto real estate market could begin to cool off in the New Year. As more people are working from home, they could opt to move to less densely populated areas where the cost of living is lower and where they can afford bigger homes and properties. Cities like Quebec City, Waterloo, and London have been popular choices over the last year.
But while it may be true that some GTA residents are leaving, the fact is that demand in the Toronto area has remained high during the COVID-19 pandemic. And when experts are polled, Toronto consistently remains as one of the top four markets in Canada.[i]
Toronto housing prices
2021 will continue to provide a sellers’ market in Toronto as high demand and low inventory are still an issue. From January 2020 to October 2020, we saw the average price rise to $918,883 and in 2021, we expect to see another 6% increase to $974,015.
We expect that supply will remain low throughout 2021, which could drive prices up further.
While the GTA’s condo market has softened a bit, this is expected to be short-lived. Developers are looking at ways to make Toronto condominiums more attractive in the post-COVID market. Innovations like rooms for videoconferencing and dedicated areas for deliveries of groceries and parcels will be just a few of the amenities that we can expect to start seeing more often in the New Year.
What is driving demand?
As mentioned, while some Torontonians are moving out of the city to save on costs, this is being offset by many others who are still moving into the city. In particular, we expect to see an influx of immigrants as well as those moving to Toronto for education purposes.
Contact Adelson and Weiss today
If you are looking to buy or sell a home in the Toronto area in the coming year, it is important to work with a real estate firm that has its finger on the pulse of the current trends. To schedule a consultation, give us a call today.
