It’s hard to believe that another year is coming to an end. With 2020 quickly approaching, the Toronto real estate market has certainly seen its fair share of ups and downs in 2019. At this rate, the new year should promise to be just as interesting as the last in the real estate sector.
With more people choosing Toronto as their home, demand for housing in Canada’s largest city continues to grow. In fact, according to Statistics Canada, the country’s population grew by 531,000 from August 2018 to July 2019 – the largest 12-month increase in history. Nearly 60 percent of the population growth took place in Ontario and British Columbia.
The demand for homes plus lower interest rates are leaving a crunch in supply at an all time high. Buyers are also getting used to much stricter mortgage lending laws, which has helped cool the market in a small way.
In 2020, Toronto home prices are predicted to rise 6 percent, bringing the average cost of a home to over $800 thousand. A strong local economy and high employment rates are the two main contributing factors to the predicted increase.
With inventory low, we should watch and see what happens to supply as the baby boomer population reaches their 60s and 70s and starts to downsize, which could have a massive impact on the market. We may start to witness an uptick in construction of purpose-built housing, which can be attractive to the older population because this type of housing provides more security than a condominium.
As the younger population continues to flock to the city searching for an urban lifestyle, there will be more people coming than going. Another trend to watch for in 2020 is co-living spaces, or a form of housing where residents have individual space in a shared property. And since more businesses are moving into the city, we may also see the potential for corporations to build or buy their own housing as a means of attracting employees.
A recent survey conducted by RE/MAX found that 51 percent of younger Canadians are considering buying a property in the next five years, so it’s not offbase to predict that the housing crunch is going anywhere in 2020.