GTA sales and price forecast trending higher for balance of 2021

The mid-year market outlook is trending higher than previously forecast, as GTA home sales and average sale prices were higher than expected in the first quarter of 2021, especially in March when we set an overall monthly sales record.

For 2021, we are forecasting a total of 115,000 sales with an average sale price of $1.07 million. Since the beginning of the year, sales growth has outpaced that in new listings, which resulted in a double-digit annual pace of price growth.

Record-breaking sales

At the beginning of February, TRREB released its initial forecast in the annual Market Year in Review and Outlook report. While the previous outlook called for strong sales and an average selling price of more than $1 million, the updated outlook is a result of the record-breaking sales we saw in the first three months of the year.

The record pace of sales peaked in March, with June transactions moderating, but still up year-over-year. On a monthly basis, sales generally follow a seasonal trend that sees sales volume moderate through the summer months. As for price, there was a double-digit increase compared to last year, but, as with sales, the year-over-year increases have moderated recently.

The moderation in the market consistent with seasonal trends is likely temporary, with a resumption in population growth from immigration only months away. This will lead to more competition between buyers, with a perpetually constrained supply of housing.

Continuing challenge

Housing affordability will continue to be a challenge, as more people enter the GTA and require housing. TRREB has been calling on all levels of government to boost supply by cutting the red tape on new developments and streamlining the approval process to bring more inventory to market in a timely manner. In looking to solutions, a significant increase in supply is the only option to satisfying housing needs in a growing region. Policies focused on suppressing demand and utilizing housing transactions as revenue tools for municipalities have not worked.

Whether renting or buying, affordable rental and homeownership options are critical. Policymakers, who will be up for election in 2021 or 2022, need to develop and present their strategies for a better-supplied market moving forward.

Learn more about what is happening in the real estate market by visiting trreb.ca. You can explore market reports across the GTA, including insights into the condo, rental and commercial market.