Housing Market Q4

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The GTA housing market in 2020 performed very differently than expected during the early stages of COVID-19. As the economy entered its initial lockdown, this year’s total number of sales recorded is the third-best on record since 2016?!? Isn’t that insane?

In the first quarter, sales were strong. It then took a plunge in activity during the second quarter and it quickly rebounded in the third quarter to finally make a 33% increase in the fourth!

This is all to say that despite the souring virus cases, buyer optimism continued to surge to end the year.

Why was there a rebound despite the first lockdown?

Well the initial thought was that it was driven by pent-up demand accumulated during the spring resulting in a gradual decline in activity by the end of the year.

However, what we learned, was that employment losses that occurred last year were focused on younger, hourly wage workers as opposed to permanent, salaried employees, which led to a very different result for rental and ownership markets.

This pandemic also caused a desire to change living arrangements, therefore demand for properties in the 905 regions became a central theme for the market in 2020 with detached sales having increased by 15%.

Although there was sales growth in semis and towns, it was to a lesser degree than that of the detached homes.

This resulted in a growth in sales that outpaced the growth in new listings resulting in a seller’s market during 2020.

Another important factor to buyer activity was the unprecedented government support for household income, credit and the reduction of interest rates to keep mortgage delinquencies low and demand for housing high

What has been happening with demand over the past 5 years?

Let’s take a look at this graph, detached homes have been steadily increasing since 2018 by 15% year over year. In this five-year overview, we are able to see a bigger gap being created between detached homes and condo apartments.

Now if we take a closer look at this year only, it further proves the gap being created between these property types!

Why is it relevant for you to know about this gap?

Looking at the numbers of January that just came in, I was surprised by the robustness of the GTA’s market right now! 2021 has started up with a flurry of activity! There is sales growth across all major segments including condominium apartments in both the city of Toronto and the surrounding GTA regions.

As of right now, months of Inventory are down to approximately one month! This is highlighting the lack of inventory of homes for sale reflected across all home types.

As for condominiums, demand has begun to rebound since 2020 due to the limited inventory of available homes for sale that resulted in many buyers and investors to have turned towards the purchase of new construction.

if we continue to see condo sales grow, they will outstrip condo listings growth, and later in the year, we might start to see renewed growth in price for condos!

As for detached homes, if we continue in this upwards trend, I believe this will be the best time to sell your house for the best possible price!

If you want a specific update on your neighborhood’s market don’t hesitate to reach out, let me buy you a coffee!

What's to come in 2021