Predictions and Expectations for the Toronto Real Estate Market During Fall 2020

Predictions and Expectations for the Toronto Real Estate Market During Fall 2020

The Toronto Real Estate Market did well during summer 2020. There are only positive reports coming from teal estate agencies such as condomapper.ca. That might not make too much sense considering the coronavirus pandemic and the recession. But once you dive into the trends, anyone can see that low-interest rates, pent-up demand, and modest supply drive the market. 

 

Consequently, home sales in the GTA reached an all-time high of 11,083 transactions. Compared to the same period in 2019, that’s a 42.3% increase. The average home price in September was $960,772. Compared to September 2019, that’s a 14% increase, year-over-year. Furthermore, data and stats from the Toronto Regional Estate Board reveal double-digit sales in all segments of the real estate market: townhouses, detached houses, semi-detached houses, and condominiums.

 

The most pressing question at the moment is - can this trend sustain in the fall?

 

A report from RE/MAX suggests average house prices will increase by 5% for the remaining months of 2020. They believe that the overwhelming demand combined with low-interest rates will encourage many people to invest in real estate.

 

However, the condo market is the one segment of the real estate market that will most likely come under pressure. It is well documented that many urban families are searching for ways to replace their condos with a house with a backyard. Many had already sold their condos and moved to detached and semi-detached houses in the suburbs and smaller towns. 

 

It seems that the fear of going through another lockdown while living in a condo is doing its part, even though officials dismiss the idea of another lockdown, similar to what we experienced during this year's spring. 

 

The collapse of the short-term rental market also did its part in the decline of the condo market. Many condo owners are either pivoting towards long-term rentals or simply list their condos for sale. As a result, there are hundreds of condos listed for sale on top of the current offer. Plus, there are thousands of condos still in construction that will be completed in the next few years. 

 

The low-interest rates also affect the condo market, but not in a good way as most people would rather buy a house than a condo, even if that includes additional debt. 

 

The simple truth is that the condo segment of the real estate market is bound to slow down, and that’s pretty much unavoidable. The condo market dominated the Toronto real estate sector in the last two decades, but that was back then. 

 

In Conclusion

The housing market will do good this fall, whereas the condo market is slowing down. That’s pretty much a sure bet considering everything that’s going on in Toronto, in Canada, and the world in general. The only thing that can change the course of things is another lockdown is unlikely. Most experts believe that we can go through the second wave of infections that is already upon us, but that we have learned some valuable lessons and that we will get through it somehow without any lockdowns. 

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