Strong demand, record prices forecast for GTA in 2021 – TRREB

Continuing from a strong finish last year, 2021 will be another healthy one for the GTA real estate market, with strong buying intentions, a near-record sales forecast of more than 100,000 and a record average selling price of more than $1 million.

On Feb., 8, the Toronto Regional Real Estate Board (TRREB) released its Market Year in Review & Outlook 2021 Report, detailing its annual market outlook, up-to-date Ipsos consumer polling results, the most recent Altus new home and commercial statistics, rental and mortgage market trends.
“The pandemic certainly resulted in an unprecedented year for real estate in 2020, but it hasn’t put a damper on the overall demand,” says Jason Mercer, TRREB chief market analyst. “Looking ahead, a strengthening economy and renewed GTA population growth following widespread vaccinations will support the continued demand for both ownership and rental housing. But over the long run, the supply of listings will remain an issue, particularly in lowrise segments.”

2021 outlook

Strong sales growth will be supported by continued economic recovery, including jobs and record or near-record lows for borrowing costs.

The pace of new condominium apartment listings will begin to ebb, especially in the second half of the year. With lowrise listings remaining constrained, total new listings are expected to come in at the 160,000 mark.

Market conditions for lowrise homes, including detached houses, will remain tight, with sales rising at a faster pace than listings.

The overall average selling price for all home types and areas combined will eclipse the $1-million mark for the first time, reaching $1.025 million and representing a year-over-year increase of 10 per cent.
Experts do not anticipate any pronounced uptick in mortgage delinquencies that would create systemic concerns as we move through 2021. Most property owners who took advantage of mortgage deferrals did so out of an abundance of caution rather than financial necessity, and therefore have resumed their regular payments.

January 2021 stats

January home sales amounted to 6,928 – up by more than 50 per cent compared to January 2020. This strong start to 2021 included sales growth across all major segments, including condominium apartments, both in Toronto and surrounding GTA regions.

The average selling price for January 2021 was up by 15.5 per cent to $967,885 year-over-year.

Price growth was driven by the lowrise market segments, while the average condo unit price in Toronto was down. However, if we continue to see condo sales growth outstrip condo listings growth, renewed growth in condo prices could return later this year, according to TRREB.

2020 in review

Last year was punctuated by unpredictable ups and downs, but the second half was marked by consecutive monthly records for home sales and average selling prices. The end result was the third best annual sales total on record and a new record for the average selling price. The suburbs experienced the strongest sales growth, especially in single-family homes, with the average selling price topping out at almost $930,000.

“When the pandemic hit, TRREB outlined a detailed policy brief on government economic initiatives to municipal, provincial and federal governments,” says TRREB CEO John DiMichele. “With regards to housing supply, our key recommendations are to expedite the creation of missing middle housing, that is, multi-unit lowrise housing between detached and mid- to highrises. It is crucial that we expand these development opportunities in residential areas, which are currently only zoned for detached and semi-detached housing.”

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