Summer became the new spring for Toronto’s real estate market. The epicentre of Canada’s property sector was at the receiving end when the pandemic struck, but the comeback was nothing sort of a miracle.
Toronto flaunted impressive real estate numbers with the reopening of the economy and dodged slowdown rumours, something that has rubbed off well on the real estate community. The blazing summer performance of Toronto’s real estate spilled into autumn, a time when the housing market cools off till the next spring. Real estate agents are thus trying their best to close as many real estate deals as possible and end the year on a high.
One of the highlights of Toronto’s property market during these months is the phenomenal increase in property prices. According to Toronto Regional Real Estate Board, the average selling price saw a 20.1% increase to $951,404 in August. This unbridled rise in property prices promoted many first-time homebuyers to rethink their buying decisions, as they were priced out of this real estate market.
However, Toronto still continued to sell homes in good numbers. TRREB registered a sale of 10,775 homes, a 40.3% jump from the previous year. Looking at the performance of the market now, can we say that this is the beginning of something spectacular for Toronto’s property sector. Or is it just a purple patch! Let’s have a look at the trends dominating the real estate market of Toronto.
Robust buying power: The drop-in interest rates by The Bank of Canada by 150 points to 0.25% came as a breather for thousands of homebuyers who were upbeat about buying a home. With cheap credit and an increase in borrowing power, homebuyers are able to stretch their housing ambitions and buy bigger houses.
The historically low rates also served as a silver bullet for the government to steer the battered economy towards recovery.
Rental market softening: Toronto’s vigorous rental housing sector contributes a significant part to the property market’s graph. For long, renters have enjoyed healthy revenues from the incessant flow of immigrant folk and international student community. However, widescale unemployment, low demand, a greater supply of units, eviction of tenants and shift of rental policies from short-term to long-term, has triggered a softening of the rental market. Many unemployed and evicted renters have left the city while some have vacated rental premises in search of homes in the suburbs, looking at the fall in interest rates.
Tightening real estate market: The huge pent-up demand for homes burst out in the open with the unlocking of the economy. Homes sold faster than new listings hit the market, leading to an enormous shortage of new homes. Many homeowners on the brink of putting up their homes on the market stepped back, fearing the impact of the pandemic on the future of the housing market. This led to an uptick in prices that snowballed into bidding wars, bully bids and blind auctions.
Immigration at a new low: The eruption of the pandemic and the subsequent restrictions imposed by the government cut the immigration rate of Canada. New permanent residents arriving in Canada fell by 44.2% in June, to 103,000 till now. Since the bulk of real estate sales come from the immigrant population, this sudden downward trend has hugely affected the real estate market.
Digital real estate transactions: Digital real estate transactions have become the new normal in Toronto. Though Toronto is at stage three of unlocking, homebuyers and real estate agents are more interested in online tools and platforms to buy and sell real estate. For open houses, strict social distancing rules and protection measures are taken by real estate agents to prevent any unnecessary contraction.
Toronto’s real estate market is back in full swing and is expected to maintain this good form ahead. With unemployment decreasing, consumer spending rising and business confidence at a high, it can be said that the country’s most valuable property market is back with a bang.