2021 Toronto Real Estate Market Predictions
2020 has been a rocky year for us all, but it's finally almost over. Let's look forward instead of back, and take a look at the predictions for 2021's housing market. With a special focus on the ever-changing landscape of Toronto's real estate market, it's sure to be an interesting time to come!
Toronto's housing market is now fairly starkly divided into freehold homes and the condo market. With the division comes two distinct set of pricing, supplies, and behaviors.
The Freehold Housing Market
Supply in the freehold market is severely limited at this time, with space limited and most available land being used more efficiently to build condos. Homes are in ever higher demand for growing families.
While scarcity of detached and semi-detached home in Toronto's supply market is nothing new, Freeholds just outside of downtown are in a uniquely in-demand situation now. Thanks to COVID-19, many employees have switched a work from home model. This has allowed for those who used to need to live in a condo to be close to their downtown jobs to spread out. Torontonians are starting to disperse for the larger yards and (slightly) cheaper prices of the extended GTA.
Research data predicts a price increase of approximately 7.5% in 2021, putting the average price of a two-storey home at around $1,185,800.
The housing market for freehold definitely favors the sellers, as people continue to disburse as we discussed above. If you have the property and are thinking of selling, now is definitely a prime time to consider!
The Condo Housing Market
Condos are definitely more ripe for buying at this time. While supply is still limited, developments are still continuing along and adding to the market. This combination of situations is keeping condo pricing relatively stable moving forward.
Condos are currently most sought after by new immigrants coming to the country and city, many for education purposes. The cheaper price of condos makes them good starter homes.
The median price of Toronto condominiums is forecasted to increase only 0.5% to approximately $600,800, with the most increase being in condos in the GTA, but a small reduction in price in central Toronto.
If you're looking for a direction to invest in 2021, we would suggest aiming more towards the freehold market at this time, as from what we can estimate from current trends, condo costs are not showing much appreciation.
Across all markets, there is a marked shortage of supply, so no matter what you're looking to invest in, sooner rather than later is always suggested. Toronto's housing market has two months of inventory and it continues to decline.
In positive news, the economy has been recovering faster than was originally predicted following the near standstill the market came to in the first months of COVID-19. Sales activity has returned to record-high levels. Analysts predict that the Bank of Canada will continue to keep the mortgage rate at its current low rate to assist in a continued recovery.
The landscape of Toronto is always changing in new and exciting ways, and following the thread of social changes to market trends is always fascinating. We look forward to seeing which of these predictions come true and which get thrown for a loop by unforeseen circumstances.
While in general, the market is volatile in these uncertain times, one can never forget that real estate is a universally appreciating investment in all forms. If you'd like an assessment of what best to explore with your 2021 endeavors, feel free to contact us! Our Broker of Record, Salar Taba, has many years of experience in the Toronto real estate market and is happy to help both new citizens and long-time investors alike make the best choices in the coming year.