Home price growth continues to soar during pandemic

By NextHome Staff
October 20, 2020

Not even a second wave of the pandemic is enough to put the brakes on price appreciation in Canadian real estate markets. This, according to the latest Royal LePage House Price Survey and Market Survey Forecast.

And as has been the case for most of the year, Ontario continues to be the star performer.

Royal LePage expects the housing market to hold onto gains achieved this quarter, and that prices will end 2020 seven per cent higher than in 2019 – including an 8.5-per-cent hike in the GTA.

The aggregate price of a home in Canada increased 8.6 per cent year-over-year to $692,964 in the third quarter, as high demand and low inventory continued to fuel a sellers’ market.

Chronic under-supply

When broken out by housing type, the median price of a standard two-storey home rose 10 per cent year-over-year to $819,906, while bungalows increased seven per cent to $570,701, and condominiums 5.3 per cent to $510,365. Price data includes both resale and new build.

“Typical consumption patterns have been disrupted in 2020 as the pandemic has driven the household savings rate to levels not seen in decades,” says Phil Soper, president and CEO of Royal LePage. “Most Canadians have sharply reduced spending on discretionary goods and services involving a great deal of human interaction, and with mortgage rates at record lows, many have refocused on housing investments, be it renovations to accommodate work-from-home needs, a recreational property or a new property better suited for the times.

“In urban centres across Canada, housing inventory has failed to keep up with household formation,” Soper says. “Chronic under-supply has created a robust pipeline of potential buyers that currently far outsizes the number of homeowners who may need to sell as a result of COVID-19 related job loss.


Greater Toronto Area

The aggregate price of a home in the GTA increased 11 per cent year-over-year to $922,421 in the third quarter of 2020. When broken down by housing type, the median price of a standard two-storey home increased 12.2 per cent to $1.08 million, while bungalows rose 10.6 per cent to $887,156 and condominiums 6.8 per cent to $599,826.

Similar strong home price gains were seen in Toronto, where the aggregate price of a home rose 11.1 per cent year-over-year to $975,980. Standard two-storeys increased 15.5 per cent to $1.48 million, while bungalows rose 11.3 per cent to $974,295 and condominiums 4.9 per cent to $644,903.

The detached home market is outperforming condos, but condo demand is still considered healthy. Condo sales were up 15 per cent in September 2020 compared to September 2019.

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