Toronto Housing Market Predictions

Toronto Housing Market

Home sales in October across the GTA market hit the second highest level ever for this month.  That happened while listings actually have shrunk by one third from October 2020.

The housing crisis continues with our 3 levels of government sliding by their responsibilities to ensure adequate supply of housing. This is to meet demographic changes and incoming immigrant buyers who need housing.

The Canadian media have been eerily quiet on the lack of homes for sale in the Toronto area. This is a significant issue that can hold the economy back, put pressure on social programs and result in homelessness. Clearly, GTA citizens need to rally and put pressure on politicians to open up land for development and provide tax support for Ontario builders.

We need to share the message of more housing, supported by TRREB in their monthly report. As Jason Mercer, TRREBs chief economist says, there is a lot of confidence in Toronto’s economy and demand will not go away. The fundamentals of buyer demand will only grow in 2022. The common forecasts we’re hearing from other economists, that demand will go away and prices will fall is ludicrous.

TRREB reports the MLS® Home Price Index Composite Benchmark rose an astonishing 24.2% over the last 12 months. Only a housing market crash could cool that trend.  In October, the average selling price for all homes combined rose 19.3% year-over-year to a new record of $1,155,345.

October’s Home Sales and Price Changes

Buyers see the Toronto housing market (and Vancouver real estate too) as a solid investment value. We wonder if more money from the stock market and bank accounts will find its way into the GTA market in 2022.

Buyers continue to move out of Toronto 416 area code to neighboring smaller cities. This is making prices in these cities unaffordable for those who want to continue living in their communities. Detached house prices rose 29% year over year.  Townhouse sales in Toronto rose 5.4% yet that supply is likely to dry up, and prices should rise substantially by spring of 2022.

Screenshot courtesy of TRREB

According to Knight Frank’s Q2 global housing report, Toronto has the fastest rise in home prices. The 12 month change was a whopping 27%.  What do you suppose is so unique to this city that is driving such steep rises?

The average price for all home types combined was $1,062,256 – up 12.6% vs 12 months ago while prices for single detached houses hit $1,405,478.

See the detailed price chart for Toronto districts below.

This strong upward pressure on home prices will be sustained in the absence of more supply, especially as we see a resurgence in population growth moving into 2022,” said TRREB Chief Market Analyst Jason Mercer.

Right now is a good time time to sell your home. And you can sell your home fast with perhaps no commission, or sell it for more with a Realtor. Big demand and bidding wars means no price is too outlandish. Buyers are desperate.

The Toronto condo segment has recovered well and is expected to continue given the shortage of units, the demand from new immigrants, returning workers to the high density housing in GTA urban areas (Toronto).

For the 2022 forecast, Royal Lepage’s CEO Phil Soper is forecasting the aggregate price of a home in the Greater Toronto Area will rise 14.5% in the fourth quarter of 2021 vs Q4 of 2020.  This means the Toronto real estate market is about to heat up as businesses reopen. If you’re in need of selling your house fast, see the report on iBuyers and how to sell your home fast.

Toronto Home Price Charts for October

New home listings Toronto.
New listings Toronto. Screenshot courtesy of TRREB.
Sales and Prices.
Sales and Prices. Screenshot courtesy of TRREB.
Screenshot courtesy of TRREB.


“There has been strong demand for ownership housing in all parts of the GTA for both ground-oriented home types and condominium apartments. This was fueled by confidence in economic recovery and low borrowing costs. However, in the absence of a normal pace of population growth, we saw a pullback in sales over the past two months relative to the March peak,” said TRREB President Lisa Patel.

Screenshot courtesy of TRREB.

Year over year sales/price changes are not highly indicative of where the market is moving, they clearly show demand is very strong. Since the recovery hasn’t started fully, we can expect huge price gains this summer as more potential home buyers regain their financial confidence.

Toronto Housing Prices

King, Markham, Brampton, Toronto Central, King, Whitchurch/Stouffville saw big gains in house prices while Bradford, Brock, Innisfil, Milton, Halton Hills, and Burlington suffered sizable losses in price.  It seems buyers cannot find the houses they’re hoping for far from the city, or they are having issues about the commute to Toronto to work.See more on the Toronto condo market report. As we progress to summer, condos will become the big Toronto housing market story. But for now, houses are the object of everyone’s affections.

Take a look at the home price rises of the last 4 years. This is the shocking stat that most buyers and politicians have lost site of. This really is an election issue, as we head to even higher prices and less housing supply in the GTA. GTA housing stats courtesy of TRREB.

City of Toronto Condo Prices

Screenshot courtesy of TRREB.

GTA Towns and Cities Condo Prices and Sales

Condo prices in GTA Region. Screenshot courtesy of TRREB.

TRREB’s 2021 Market Forecast

MLS home sales expected for the full TRREB region to reach 105,000 in 2021.

  • strong sales will result due to the resurgent economic recovery, including jobs and record or
    near-record lows for borrowing costs
  • new condominium apartment listings will slow, particularly in the latter half of 2021
  • low-rise condo listings will be constrained, with total new listings around 160,000 for the year
  • low-rise homes  including detached houses will be in low supply with sales rising faster than listings
  • average selling price for all home types in the region will rise above $1,000,000
    and may reach $1,025,000 (+10% year over year price growth)

Interestingly, TRREB’s research partner believes zoning restrictions are the top problem darkening the Toronto housing market outlook.

Allowing conversions of single-family houses for additional units could result in the rapid addition of 300,000–400,000 units in Toronto and would make a major contribution to addressing housing
affordability. Increasing the missing middle can also stabilize the population while helping to sustain
schools, social and retail amenities,” said Joe Berridge, Urban Strategies Inc. Partner.

Since local governments are clearly NIMBY’s, freeing up land across Ontario is not likely. These restrictions may be the number one factor in the Toronto housing market outlook and colour all price predictions, and until public outcry reaches a fever pitch, with homelessness rising too high, home prices can only soar further.

Is a housing market crash even thinkable, given the recovery is so near?  Is a quick downturn more likely in 2022 as government stimulus in the US dries up?

Condo Prices and Sales in Toronto

As the pandemic eases, we’re seeing a strong return of condo sales and condo rentals in the GTA.  With supply high, buyers are able to get a better price, but sellers aren’t having to lose much in the sales price.

Work from home won’t end as employers will cringe at continuing to pay Toronto commercial office rents and are buoyed by the lower cost of remote working.  Yet the exodus from the inner city in Toronto will slow as practical issues of high home costs, lack of home supply, and distance to the office take over.  Condo sales and prices are already starting to recover.

The lack of housing supply is making finding a home in the GTA very difficult. It is real estate in Vaughan, Bradford, Newmarket, Aurora, Richmond Hill, Milton, Stouffville, Pickering and Whitby that everyone is after.

Interestingly though, CMHC with its Toronto real estate market crash style scenario. CHMC said Toronto (and Vancouver homes) are highly overvalued and a drop of prices in the neighbourhood of 20% is coming.  With all due respect to CMHC, they should avoid looking at fundamentals, because human market demand is an emotional thing.

With mortgage rates so low, there’s a desperation among young buyers to buy and lock in at low rates.

Buyers are finding opportunities in small cities outside Toronto and are able to find a way to make the move North, East or West.

Sales have been strong in the Montreal and Vancouver real estate markets as well.  Toronto Home prices in each district/city are updated below, showing the rapid growth in the last 6 months.

My previous forecast of a big increase in Toronto home prices in June, July and August did happen and a further prediction of home prices rising through September, October and November is looking good.  Let’s not forget there are Realtors and journalists calling for a collapse of the Toronto market.

The pent-up demand from April and May is still adding to the new home price inflation however, this is new demand that’s impacting prices and sales numbers. Cities such as Uxbridge, Halton Hills, and Oakville were the big gainers last August. And the trend in the 905 area code continues.

With mortgage rates at historic lows and loan refinancing still frequent, the market is loosening up. However, with Covid still actives, US trade tensions heightening, and the US election in two months, we’re hearing more talk about a housing market crash. And a Toronto housing market crash is possible if the US economy should collapse.

As you can see in the monthly Toronto GTA region 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 into the fall season.

See more on the Vancouver real estate market, Calgary real estate market, Okanagan real estate market and the York region real estate market.

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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 however buyers should note their warning, that there is a heightened risk this fall. Perhaps not a housing crash but a correction is not out of the question given the turmoil in the US.

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.

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

See July’s Toronto home prices below.

But home buyer intent is a key matter. It’s likely that high demand vs low availability will keep the Toronto housing market intense and we’ll see rising prices and bidding wars increase through 2022.

2021 Canadian Housing Market Forecast

For context for Toronto real estate market against the rest of Canada’s Property 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. Fortunately, low mortgage rates are aiding in problem and helping homeowners refinance.

DBRS predicts a drop in 10% to 15% for home prices due to Corona Virus. Toronto and Vancouver 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.

Compare Toronto’s property market outlook to the US housing market forecast.  You can view the prices for each city and MLS district below. Also, keep an eye on Toronto condo prices as the pandemic passes.

More on the Real Estate Market | Housing Market ForecastCanadian Housing Market | Houses for SaleWill House Prices Fall?Toronto Housing Market Forecast | Vancouver Housing Market  | Calgary Housing Market Forecast | Kelowna Vernon Penticton BC Housing Market | Mississauga Housing Market | Vaughan Real EstateNewmarket Aurora Real Estate | Bradford Homes for Sale

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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