Toronto Housing Market Predictions

Toronto Housing Market Predictions

Toronto Housing Market Forecast 2020

The TRREB July 2020 housing market stats again reflect how hot the Toronto housing market is right now.  Prices and sales soared in July with big gains over last months reports.

The GTA economy is looking much better, and buyers are ready to buy.  Toronto is one of the  hottest housing markets in North America. Home sales may not be the records of the spring of 2017, but sales and prices are rising fast.

 

Toronto Home prices in each district/city are updated below, showing the rapid growth in June and July.

My forecast of a big increase in Toronto home prices in June, July and August continues correct, and August’s sales numbers will be the best yet.  With the Corona Virus easing, and Toronto home owners wanting to sell to move to the burbs or further out into rural areas, transactions are growing.

 

TRREB’s President Lisa Patel suggests fewer people are traveling, an interesting point. It seems buyers have more time to think about moving, perhaps more motivation due to boredom, and a need for more living space, and perhaps growing dissatisfaction with where they are now.

The work from home mandate may continue as businesses may not be able to afford to move back into pricey downtown condos, or the office spaces nearby.  Toronto businesses might find this cost reduction can make them more competitive.

There is considerable pent up demand from April and May which may be inflating numbers this month.

 

 

As you can see in the Toronto home prices and sales details, upward momentum is strong.  The growth in prices in each regions is astonishing and there is little to suggest it will slow.

 

July Home Sales Report. Screenshot Courtesy of TRREB.

 

Toronto Home Sales Rising in July

TRREB recorded 11,081 sales through the MLS® System in July 2020 – a 29.5% increase over July 2019 and the highest totals for the month July in its history. Sales were up 49.5% compared to last month.

May home sales were up 55% compared with April, and then in June they rose by 89% over May’s totals.   That was a warm up for July as single detached house sales ro another 43.7% and townhouse sales rose 31%.

The average selling price for a home in Toronto was up by 16.9% year-over-year to a new level of $943,710.  That is 10% higher than last July.  That price was up 5% from last month.

Toronto Home Sales Summary July. Screenshot courtesy of TRREB.

 

There were 17,956 new listings in the GTA, a 24.7% growth compared to last year. Sales to new listings ratio jumped 3 points to 62%.

Active home listings in the MLS by the end of July 2020 fell by almost 16% compared to July 2019 to 15,018 homes.

Days on market dropped from an average of 26 days in June to 24.5 days in July.  TRREB has noted that big growth in new listings will be needed to avoid bidding wars and high prices in August and September. The typical buying season has shifted a couple of months and the fall buying season should be brisk.

Toronto Home Prices Timeline last 3 Years. Screenshot courtesy of TRREB.

Condo Sales in Toronto Were Subdued in June and July

It is the migration away from the GTA and the Covid 19 threat that is really weighing on the condo sector. However, as you saw in the TRREB charts earlier, sales and prices are still well up from last July.  That tells us demand is very high for any type of dwelling.

Screenshot courtesy of TRREB.

 

TRREB home sales details May 2020. Screenshot courtesy of TRREB.

Toronto Home Prices May

This chart below shows monthly home prices contrasted with each of the 3 previous years, which had normal real estate market drivers.

This time, June, July, and August are post Corona Virus shutdown volumes and house prices. These will show marked jumps for each of those months.

Chart courtesy of TRREB.

 

 

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Looking Back at CMHC’s Forecast for the Toronto Market

REMAX and the CMHC are in disagreement on the shape of the Toronto real estate market. CMHC is offering a gloomy forecast of up to 14% reduction in home prices. Their argument stems from Canadian debt loads, unemployment and mortgage deferrals. They’re not fans of the Canadian recovery.

CMHC might be stuck with a lot of that debt, so is their forecast might be an attempt to move the market, to soften their own exposure somehow.

Remax calls CMHC recent predictions irresponsible and panic inducing. Remax argument is that although mortgage deferrals (CMHC estimates 20% of mortgage holders by September) and mortgage defaults may rise or hit a peak in a certain month, it will be short lived dip.

Remax points out the shortage of homes for sale and home owners refusal to sell at a big discount.  I think Remax forecast is more reliable, built on sales data which suggests a strong market of buyers. There a lot of people in the GTA who want to buy a home.

CMHC gloomily predicts Canada’s housing market won’t recover till mid 2022 and we won’t reach the depths of the recession until 2021.

Yet, what the REMAX position on this doesn’t reflected macroeconomics — including US protectionism, low oil prices, high consumer debt and a brewing cold war with China. If manufacturing is brought back to Canada and the US however, our economies stand to gain a lot.

Prime Properties To’s Zhen Liang talks specifically about house, condo, townhouse price and listing trends in Toronto.

So the Toronto real estate forecast has many possible influences and the outcome is more political than financial.

See April’s Toronto home prices below.

Welcome to this in-depth look at the Toronto housing market and forecast along with the last few months data from TRREB. The monthly Toronto home prices for each district are below. It’s a market that’s had a lot of wrinkles for years, and due to the big shutdown, in the next 3 to 6 months those might get ironed out.

2021 looks more promising, and buyers might start to think longer term as they arise from their self-isolation depression. Never predict a market based on the current mood. Instead look at the underlying fundamentals of demand and supply, as well as buyers ability to purchase.

But home buyer intent is a key matter. It’s likely that high demand vs low availability will keep the Toronto housing market intense right into 2021.

Canadian Housing Market Forecast

For context for Toronto market against the rest of Canada’s housing markets, is this chart/forecast from TD Bank. They’re predicting a very big return of home sales in 2021, yet moderate price gains for the most part. Toronto’s outlook looks best with a slightly lower price rise.

Screenshot courtesy of TD Bank.

CBA Reports High Number of Mortgage Deferrals

The Canadian Bankers Association reported almost 500,000 requests for mortgage deferrals or to skip a payment were accepted in March throughout Canada. There over 720,000 mortgages deferred up to April 29. That’s almost $1 Billion per month and CBA says the numbers will increase in May and June.

CBA didn’t report the latest mortgage delinquencies. The report shows upswing in the last 2 quarters of 2019 when the economy was good. With a 15% unemployment rate snowballing, we can imagine what the charts look like now.

DBRS predicts a drop in 10% to 15% for home prices due to Corona Virus. Toronto won’t be exempted and should the Canadian dollar rise as expected, it will weigh on the Ontario economy, pushing unemployment higher and for an extended period. It could be this recession is not yet believed by most Ontarians.

DBRS went on to say the national unemployment rate will decline to 7.5-8.0% by the end of 2021.” That’s 20 months from now.

On the bright side for pre-qualified buyers, is a price slide. All that’s needed is for sellers to list their homes, but April’s listing numbers were as low as they could get.

TRREB reports in the newly released data for April, that sales declined by 2/3rds YoY, and detached home prices dropped 11.2% from March 2020. See the full monthly GTA & Toronto home prices changes below. The trend is typical of all housing market forecasts.

3 Month to 6 Month GTA Outlook

Given how well Torontonians managed Covid 19 this summer, a heartfelt congratulations has to go out to everyone in the GTA.  For not following the Democrat lead protests and deliberately spreading the virus.

With the economy still to fully reopen, and that we’re getting closer to a Corona Virus Vaccine, it’s easy to be optimistic. With immigration on hold and sufficient Corona Virus Aid (it seems), we can breathe a little easier about evictions and homelessness.

However, tightening supply is the key factor going forward.  Ontarians seem to be holding out well and more young buyers are eager to buy a home. That will push prices up by another 3% in Augusts and a further 2% in September.

 

 

With lower mortgage rates, buyers and a return of the economy in the fall, buyers will be more confident to bid on home and even condos in 2021.

The July housing stats for the GTA can be viewed below. Also see the Toronto Condo market update. Compare Toronto’s housing market outlook to the US housing market forecast.

Projections for the Full Year 2020

TRREB forecasts 97,000 sales in the TRREB market in 2020, yet they do mention the lack of listings available.  As we head to 2021, the housing market across the GTA from Oshawa to Newmarket to Mississauga the price competition will heat up.

New construction has been slowed and post Corona Virus mortgage financing might not be available easily.  There is word the banks are already raising mortgage qualifications.

Low mortgage rates might not be enough this go round.  There might be another round of mortgage and debt refinancing as consumers work through this period of lower income.

Rising prices are also threatening the Toronto condo market, where investors are struggling to meet their financing costs, against a backdrop of renters who won’t be able to keep up with sky high rent prices.

Condo investors are buying condos for renting and in many cases letting them sit vacant unless they get their price. There are many factors inflating what looks to be a housing bubble in Toronto.

Will you be buying or selling a property?  According to a Toronto Star survey, 46% of respondents say they won’t be buying. Most have access to only the low end of the market, and sales are actually rising in that segment, yet listings are drying up.

You can view the prices for each city and MLS district below.

Toronto Home Prices May 2020

Detached Toronto Home Prices (GTA TRREB) – July 2020
Toronto Region Cities July 2020 June 2020 May 2020 April 2020 July 2018 Price Change last Month Price Change Last 24 Months
Burlington $1,152,783 $1,097,756 $1,108,881 $1,023,262 $983,649 4.8% 15%
Halton Hills $968,572 $957,573 $946,881 $785,647 $817,493 1.1% 16%
Milton $1,051,963 $1,011,479 $951,008 $868,824 $865,283 3.8% 18%
Oakville $1,512,007 $1,571,815 $1,393,799 $1,401,160 $1,316,233 -4.0% 13%
Brampton $988,509 $941,869 $902,389 $860,847 $818,114 4.7% 17%
Caledon $1,248,730 $1,168,494 $1,108,621 $1,079,200 $964,864 6.4% 23%
Mississauga $1,277,064 $1,228,643 $1,118,835 $1,168,041 $964,864 3.8% 24%
Toronto West $1,337,138 $1,384,009 $1,248,373 $1,102,945 $1,056,625 -3.5% 21%
Toronto Central $2,350,760 $2,307,355 $2,285,310 $1,932,715 $2,308,516 1.8% 2%
Toronto East $1,122,065 $1,119,216 $1,093,699 $1,015,942 $969,928 0.3% 14%
Aurora $1,288,348 $1,274,838 $1,184,099 $1,182,150 $1,064,983 1.0% 17%
E Gwillimbury $1,072,741 $1,077,136 $903,690 $896,545 $931,082 -0.4% 13%
Georgina $712,818 $732,708 $649,396 $625,808 $632,831 -2.8% 11%
King $1,977,359 $1,821,140 $1,393,074 $1,286,250 $1,354,955 7.9% 31%
Markham $1,407,848 $1,402,751 $1,362,795 $1,261,070 $1,245,748 0.4% 12%
Newmarket $981,114 $1,002,386 $958,270 $925,538 $879,938 -2.2% 10%
Richmond Hill $1,526,892 $1,593,401 $1,319,645 $1,464,939 $1,405,514 -4.4% 8%
Vaughan $1,382,717 $1,390,834 $1,342,946 $1,243,751 $1,339,361 -0.6% 3%
Whitchurch Stouffville $1,180,167 $1,110,440 $1,314,406 $1,184,739 $923,296 5.9% 22%
Ajax $819,099 $796,805 $785,784 $764,276 $723,095 2.7% 12%
Brock $636,713 $625,595 $537,350 $427,650 $534,553 1.7% 16%
Oshawa $665,903 $629,826 $591,514 $567,134 $616,559 5.4% 7%
Pickering $1,044,811 $957,483 $883,788 $838,058 $535,153 8.4% 49%
Scugog $876,562 $687,761 $628,645 $629,649 $793,460 21.5% 9%
Uxbridge $923,475 $853,588 $992,554 $1,021,687 $681,613 7.6% 26%
Whitby $827,611 $852,485 $802,190 $710,473 $725,885 -3.0% 12%
Orangeville $717,564 $707,365 $696,127 $643,650 $590,299 1.4% 18%
Bradford West Gwill $840,353 $866,240 $753,131 -3.1%
Innisfil $669,760 $632,934 $617,422 $571,924 $554,226 5.5% 17%

 

Continue to Part 2 of the Toronto Housing Market Forecast.

 

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A quick look at the US housing trends and predictions for Los Angeles, San Francisco, Houston, Dallas, Denver, Chicago, Seattle, and Florida, tell you the US is hot. Check out forecasts for Boston, New York, Miami, and San Diego.

Homebuyers are still willing to look beyond the green spaces belt, but they’ll look at Aurora, Bradford, Stouffville, and Newmarket first before heading north.

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22 years of experience as a content researcher, strategist and SEO expert for marketing agencies and his own company. Gord's investigation into housing markets, stock markets, and AI marketing strategy helps clients achieve market dominance. Some of Gord's blog posts have achieved half a million pageviews with over 7,000 social media shares, revealing Gord Collins special talents for building reach and impact. Visit the AI Marketing website for an introduction to the AI marketing era. Artificial Intelligence is lending extra benefit to the power of marketing software which is enhancing SEO, Copywriting and Sales. Gord offers a new brand of SEO services and to regain his reputation as a leading SEO expert. See his 2nd book which describes the powerful relationship between SEO and Content Strategy. Gord's passion is researching algorithms, trends, forecasts, and market statistics to establish clients at the top.

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