After an astonishing first quarter of 2021, home prices and sales continue to go up in the Greater Toronto Area during the busy spring season. The Toronto Real Estate Board reported over 9,000 homes changing hands in the last two weeks of March, which is an increase of 174% year-over-year. However, we need to keep in mind that the second half of March last year was quite an unusual time in the real estate market since COVID-19 in its beginnings slowed down the market abruptly. On the other hand, it still remains a significant jump when we look at the overall state of play. However, April saw a slowdown in sales and new listings.
What led to these market conditions?
The market picked up fast though in the second half of 2020 due to favourable mortgage rates and borrowing costs, as well as due to prosperous economic results in many business sectors. Since the same conditions still apply, homebuyers are still very active in the market looking to find their dream home and beat the competition to it. Adding the once again low inventory levels to the story, it is no surprise that the GTA sellers who are currently out there enjoy multiple offers and sell in record time at record prices.
This is especially true for detached homes, which are in particular high in demand in the current market as many homebuyers working remotely in flourishing industries prefer spacious houses with nice outdoor spaces to other forms of housing. The average home price for detached increased by 19.2% in the City of Toronto year-over-year, with the average home being over $1 million last month. Toronto’s real estate market was again booming with GTA homebuyers storming the market and outnumbering available listings, but in April, we have seen a slight slowdown. In April 2021, sales dropped by 12% month-over-month and listings were down by 8% from the previous month, but when it comes to prices, they are still not dropping significantly.
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The gap between supply and demand is still an issue
New listings seem not to keep up with the number of sales, reemphasizing GTA’s and Toronto’s long-term problem – the gap between supply and demand, which again resulted in fast sales and soaring prices, especially in March.
With the vaccine rollout continuing, the demand is expected to grow more in the summer, given that the businesses that were hindered by the COVID-19 measures will recover, and borders hopefully will be open again for immigration, and new inhabitants means new demand. Such an expected economic boost will create new demand in the housing market, and what will be done to accommodate the increase remains to be seen.
For more information about the GTA real estate market, available listings, buying or selling, contact Susan Macarz, Broker, here or call 416 487-5131.