'Staggering growth' dominates single-detached market in the GTA

“Staggering growth” and soaring prices are dominating the GTA single-detached home market, with no signs of slowing, according to the ReMax 2021 GTA Hot Pocket Communities Report.

A steady decline in the supply of single-detached housing in the GTA, coupled with low mortgage rates, hastened demand from first-time homebuyers and galvanized the city’s move-up market in the first half of 2021, ReMax says.

The report examined trends and developments in 60 Toronto Regional Real Estate Board (TRREB) districts, finding that inventory constraints propelled demand throughout the GTA and set the stage for unprecedented market performance. With 11,297 active listings, this was the lowest level for June in at least a decade, and down 35 per cent from the 10-year average of 17,260, surpassing the previous low of 12,327 reported in June of 2016.

Soaring values

As a result, the average price for single-detached homes soared, with values in almost 97 per cent of TRREB communities well ahead of year-ago levels, with nearly half reporting an increase of 25 per cent or more over 2020.

“Halfway into 2021, and the GTA’s housing market continues to fire on all cylinders,” says Christopher Alexander, senior vice-president of ReMax Canada.

With interest rates at historic lows, first-time buyers are scrambling to get into the market before homeownership is beyond their financial reach. However, affordability challenges continue to be exacerbated by the supply crunch. Of the 60 TRREB communities examined in the report, only six offered single-detached homes at less than the $1-million price point. This is compared to 18 communities during the same period in 2020, and 28 in 2019. All six markets were located in the 905 area.

“More transit options and hybrid work schedules have made relocation to the city’s outlying areas even more attractive,” says Alexander. “First-time buyers are feeling the squeeze, but are still determined to become homeowners, with many happily travelling further afield to make it happen while working from home.”

Housing surge

New-home construction has intensified in outlying areas in recent years. This is especially so in the communities of Clarington, North Oshawa, East Gwillimbury, North Keswick (Georgina) and Caledon, where an abundance of new housing product has come to the market as resales and are quickly snapped up.

“The most daunting aspect of the current housing surge is that this period may actually be the calm before the storm,” says Alexander. “With the worst of the pandemic hopefully in the rear-view mirror and recovery on its way, economic expansion is likely. The Bank of Canada is committed to holding interest rates at current historically low levels for at least another year. Immigration is expected to bring another 1.2 million permanent residents to the country over the next three years.”