When we last looked at the outlook for the Toronto housing market at the end of 2019, the coronavirus had not yet spread to North America, affecting citizens en masse.
More than a year later, uncertainty around the impact of the pandemic persists, but there are reasons to believe that the light at the end of the tunnel will increase in brightness as we move farther into the spring season of 2021 after a troubling fall in national sales.
According to housing market insights released in February by the Canada Mortgage and Housing Corporation (CBoC) in late February, national home sales numbers decreased significantly in the second quarter of 2020 compared to what they were before the global pandemic reached Canada.
The sales drop was likely caused by efforts by the public health department to quell infection rates by placing restrictions on travel. In Toronto around that same time, buyers were more gun-shy about purchasing during the pandemic climate, also slowing real estate sales growth, according to an August 2020 news item about the Canadian housing market based on data from RE/Max Canada and published by PR firm Cision via newswire.ca.
Despite this, growth in housing sales for the provinces covered by the report, including Toronto, had recovered and even exceeded predictions by the end of quarter three of 2020.
It comes as a relief that housing sales have rebounded relatively quickly, partially due to stronger sales for more expensive housing in Toronto and other pricey provinces in Canada.
But it is not exactly surprising.
The CBoC predicted mid-pandemic that the overall national economy by gross domestic product would recover in 2021, and that strong housing sales pre-construction lots in Toronto would help fuel that recovery, according to Price Waterhouse Coopers Canada (PwC Canada) comments about emerging real estate market trends for 2021 for Toronto.
Housing markets across Canada have strengthened overall, and Toronto is no exception. Even during the pandemic, Toronto, the suburbs, and areas farther outside the cities, such as Niagara, were seeing increasing interest in buyers making real estate purchases.
Demand for industrial real estate stayed strong around Toronto during the pandemic, and office space sales and e-commerce distribution centers were predicted to contribute to a rebound, said PwC Canada in its comments.
Most recently, despite the CBoC’s May 2020 prediction that housing prices would fall by nine to 18 percent by the end of that year compared to overall housing prices before coronavirus, prices actually rose, according to the Canadian Real Estate Association (CREA), reported CTVNews on St. Patrick’s Day.
After covid-19 orders compelled more workforce members to start working from home, in Toronto proper condos became less popular to purchase as people sought bigger properties elsewhere to accommodate home offices, reported the Globe and Mail in an article published in early March.
The surge in condo purchases in the Toronto region helped home resales reach a record high for February 2021, over 50 percent higher year over year. Lowered interest rates likely helped create that promising statistic, according to the article as well as supply shortages.
Prices on condominiums in the greater Toronto area were down nearly 4 percent as of February. Still, at the same time in Toronto, above 40 percent of condos sold for amounts greater than seller asking prices, reported Global News Canada on March 18.
As fiscal year 2021 continues to progress, Toronto is expected to be less of a focus, as the reverberations from the pandemic trickle down to smaller towns outside the area.