Your definitive guide to the Toronto & GTA housing market

Your definitive guide to the Toronto & GTA housing market

When it comes to navigating headlines and making informed choices about the Toronto housing market, it’s hard to know what to focus on. That’s why we've created this space: to help you stay in the loop with what's happening in Toronto and GTA real estate during COVID-19 and beyond. We update it regularly, so you can always come here for the most current stats, news, insights and more.

Toronto housing market: what you need to know right now

Toronto Area Illustration

Summer is officially here, and while the weather just keeps getting hotter, the market has seen a bit of a cooling. Though we have to take the numbers we’re seeing with a grain of salt: saying things are cooling just means things have gone from blazingly hot to just moderately hot. Which means it’s still busy, supply is still low, and prices are still up there. According to a recent report, a big reason for the cooling is the shortage of supply: there aren’t enough homes for sale to drive the big numbers.

Prices are still head and shoulders above where they were this time last year. Last month’s average of $1,089,536 (for all home types) beat out June 2020 by 17%. But month-over-month, the average price actually dropped a bit from May’s $1,108,453 - it’s the first time that number has gone down instead of up since last year. The number of transactions is down too, from 11,951 in May to 11,106 in June.

Get all the July real estate market stats from the Toronto Regional Real Estate Board

A slightly slower market isn’t a bad thing, however. It gives buyers some much-needed breathing room, as well as a bit of relief from constantly escalating prices.

Of course, we all know that this lull is just that: a lull.

As vaccination rates keep increasing, things open up, and immigration resumes, greater demand isn’t far off. Right now, there is a window of opportunity for buyers, but that window will slide shit as soon as our borders open to immigration. With supply still super-tight (even without immigration), there simply isn’t enough housing in the GTA to meet the intense demand looming on the horizon.

Also, if you’re looking for a rental, this may be your last chance to land a good deal. Demand is up, and nice units are moving fast - our agents are now seeing more and more multiple offers all over the city, with demand heating up for nice units and student-friendly rentals.

Property.ca data aligns with those trends.

According to site analytics for condos.ca and property.ca, number of transactions and the experiences of our agents on the ground, there has been a cooling.

We're starting to notice a slowdown in site visits, along with the popular search terms being used on Google. In January/February we had around 1.7 million users and 2.2 million site sessions a month. In March it spiked, with 2.1 million new users and 2.8 million site sessions. But in April, there were 1.9 million new users and 2.5 million site sessions, and May saw 1.8 and 2.3 million, respectively. There are fewer written deals coming in as well.

Read more: Is the market cooling? 5 experts weigh in

But the numbers don’t paint a complete picture: the cooling is only being felt in certain areas and certain types of properties.

condo interior

Condos

Distinctive units with a lot of character, a great view or a good layout are going fast. But the more “run-of-the-mill” condos are sitting on the market longer. Offer dates are coming up and getting zero offers. There are a few reasons for that:

  • The pent up demand from 2020 has been met

  • People have buyer fatigue - they’re frustrated and have stepped back from buying

  • The great weather doesn’t make anyone want to spend their days/weekends condo shopping

  • And now that things are finally reopening, people want to see friends, go to restaurants and events, and get back to normal life

All of that means there are opportunities for buyers. As soon as the borders reopen and the GTA population starts to grow again, competition will heat back up.

And price and demand really depend on location. Toronto is a collection of micro-markets, and each one is experiencing things in a different way.

The stats from TRREB aren't granular enough,” says Zach Lahartinger, Sales Representative. “For example, Liberty Village and City Place are within a kilometre of each other, but they couldn’t be any more different. So when you see a stat that says price per square foot in C01 has dropped, it doesn't give you the whole picture. Buildings like 75 Portland and 111 Bathurst are really hot because they have unique products, while an older, more generic building right across the street may have stagnated.”

However, everyone is comparing month-over-month. And yes, if you do that, it does look like the market is dropping. But taking a longer view offers a much clearer perspective.

“People are panicking and saying oh no, the market’s dropping!’ says Bayan Qandil. “But that's really not the case. If you compare May and June with February and March, then yes, it’s evident a lot less is happening. But if you compare the last couple of months to the same period in 2018 and 2019 (let’s skip 2020 because it was an anomaly), you’ll see that the traffic behaviour on our site and the numbers we’re seeing from TRREB are pretty normal.”

Houses

While things have cooled slightly in this sector, it’s still very competitive, especially in the lower price ranges. People want houses, and that isn't going to change anytime soon. For higher-priced properties, different agents are seeing different things:

“Houses in the $2+ million range aren't selling as fast as they were and many aren’t getting multiple offers or hitting the sellers expectations,” says Sean Miller, Sales Representative. I’m seeing a lot of terminated listings that are back out the following week at different prices.”

On the other hand...

“For properties in the $2M+ range there's a lot less elasticity to the market, says Zach Lahartinger. “We're still seeing really aggressive pricing, and those prices are still being paid.

Properties outside the GTA

As lack of affordability in the city has skyrocketed and people have turned to other locations as sources of housing, property prices in those places have jumped dramatically as well. And experts predict that workplaces opening back up won’t do much to change that: the CMHC “forecasts that this pandemic-induced turbocharge of so many housing markets won't wear off for another two years. Even once that happens, they say, it's not that prices will go down, it's just that they won't rise quite so fast.”

Read more: Not just the pandemic: Why housing prices are skyrocketing, and what could come next

Rentals

While rental prices are still lower than they were before the pandemic, nobody is expecting that to last too much longer. Demand is up, and prices are making their way back up. All signs point to the Toronto rental market recovering to its former strength.

Read more: Rental market enters “recovery mode” as Toronto prices rise in June: Rentals.ca

Agents are seeing evidence of that change:

“Demand is picking up, especially for larger units. Prices are going up,” says Julian Kashani, Sales Representative. “In January I had a listing that had almost no showings and took two months to rent. But more recently, a similar place had 15 showings in 3 days – and got 3 offers. Things are definitely changing. If you're looking to get into a rental at a good price, I recommend doing it sooner rather than later."

Property.ca Toronto Market Snapshot May 2021 in review
Condos.ca Toronto Condo Townhomes Market Snapshot May 2021 in review
Property.ca York Region Market Snapshot May 2021 in review
Condos.ca York Region Condo Townhomes Market Snapshot May 2021 in review
Property.ca Mississauga Market Snapshot May 2021 in review
Condos.ca Mississauga Condo Townhomes Market Snapshot May 2021 in review

Is now a good time to buy or sell?

It’s a GREAT time to sell a house, but that hasn’t changed in...forever. Based on the unrelenting demand and the chronically low supply of inventory, the market for detached homes (in the 416, the 905 and beyond) isn’t looking like it will cool down anytime soon. In fact, there's a real shortage of freehold homes (detached, semis, towns) across the GTA.

That’s driving prices skyward: the CMHC is forecasting that by 2023,the average price of a resale home in the GTA will be over $1.2M.

Is it a good time to buy a condo? It depends what you’re looking for. If it’s something a lot of people will be interested in, with amazing outdoor space, outstanding amenities, a good floor plan and a price point under a million, be prepared for some stiff competition. Those types of units are still going strong. But the demand for properties that are a bit less “special” is not quite as strong - places without a balcony or terrace, older buildings with fewer bells and whistles, units that might need a bit of TLC. That’s where the opportunity is right now: you’ll face a lot less competition. However, according to the experts and the trends our agents are seeing right now, demand won’t stay low. As we approach fall, expect things to heat back up again in a big way.

Buyers: be ready to move on a listing right away

While competition may have decreased a little, it definitely hasn’t gone away. If you want to win in a multiple-offer situation, your best strategy is to set yourself up so you can jump on a listing IMMEDIATELY.

Get pre-approved, have your deposit liquid and easy to access, and make sure you're working with a team (agent, lawyer, mortgage broker) that knows the market and can respond fast. And be prepared to make a bully offer: a well-informed agent will let you know when it's a good idea and how much you should offer.

Read more: Bidding wars and bully offers - strategies for success

What’s happening with pre-con?

The market for pre-construction condos is also seeing shifts thanks to COVID. Higher prices in the core are making pre-con units in the 905 more attractive to both investors and end-user buyers, with smaller condos driving interest for investors in particular. That’s different than it has been in the past: the 905 has typically been more of an end-user destination, but the shift to more investors is a reflection of both affordability of properties and the slow rental market in the 416.

As a result, 2020 saw more pre-con condos sold in the 905 than in the core (51%). However, despite those stats, there were still fewer pre-con units sold overall than in 2019.

Read more: Toronto Star: For the first time ever, there were more pre-construction condos sold in the 905 area than Toronto last year (may require subscription)

The rental market

Rental prices have started the climb back up to pre-COVID rates, but they aren’t there yet. There’s still time to snap up a deal on a nice rental property. According to the Rentals.ca National Rent. Report for July, there’s a higher demand for larger units, and rent prices are up nationwide compared to April. In Toronto, average price for 1-bedroom units is up marginally by 0.2%, sitting at $1,836, and 2-bedroom properties have increased 1.9% to $2,502. If you take a look at the table below, you’ll see that rents are up across the GTA, but are still lower than they were this time last year. But the gap is closing.

rentals.ca national rent rankings June 2021

Rentals.ca National Rent Rankings, July 2021

Read more: Realtors tell renters to lock in homes before the border reopens, competition stiffens

“The rental market is starting to pick up and good units are leasing quickly,” says Konrad Gloge, Sales Representative. “This isn’t the battered market of 3-5 months ago, and I believe investors are playing a big role in the surge in condo sales in the metro Toronto area.”

If you want to upgrade to a nicer place or make a lateral move to a similar apartment that’s more affordable, this is a good time. A lot of buildings are still offering incentives like free months of rent to entice tenants. But also remember that there’s more competition for larger or really unique properties, so keep that in mind as you plan a move.

Zoom meeting

How COVID has changed real estate

A lot of the changes we’re seeing as a result of COVID will probably impact the way homes are marketed and sold permanently.

The way homes are designed and marketed is changing.

Thanks to the pandemic, people are using their homes differently, and that hasn’t been lost on the industry. Home offices, multi-use spaces that can house functions like home gyms, and maximized outdoor spaces have all become a key focus.

Condos are being designed differently, but they’re also being sold differently: how many staged listings have you seen recently that DON’T highlight an appealing work from home space?

More decisions are being made virtually.

Thanks to the switch to almost full virtual over the last year and half, buyers and renters are used to basing more of their decisions on virtual tours, floor plans and photos, and narrowing their choices before going to in-person viewings. Online marketing has never been more important. Basic listings with iPhone photos just don’t cut it anymore, and most agents have really upped their game in terms of online marketing.

Virtual showings are the new open house, casual viewings are a thing of the past. Now, instead of spending a busy Saturday seeing 6 or 7 places in person, you might visit 2 or 3, but they will be more serious contenders.

Read more: What to look for on a virtual tour

More of the transaction will be done online

Everyone, from real estate companies to lawyers, has found ways to enable transactions online. From digital signatures to pushing as much information as possible into the virtual realm, there’s a lot happening to allow you to do more and more without having to be there in person.

One example is condos.ca’s digital offer capability. When you see a resale or rental property you like, you can jump on it fast by submitting an offer right from the listing - and it goes to an agent instantly. You just specify your offer amount and move-in date, and they will send you an email to let you know what you do next. Not only does it simplify the process, but the ability to get your info to the agent fast also gives you an edge over other buyers - a particularly useful thing in this competitive market.

Want to know more? Your COVID-19 questions answered.

Rules on keeping safe

After the pandemic: The future of real estate in Toronto and the GTA

COVID-19 is over, we will rebound quickly. But COVID will definitely have a lasting impact. We talked to Brendon Cowans, VP of Sales for condos.ca, about how things have shifted and what the Toronto housing market might look like moving forward.

Q: How do you think all of this impacts how we will buy and sell in the long term?

A: Some of the things agents have implemented in the short term are here to stay – things like virtual tours, and buyers being more selective about the units they see in person. I think buyers will be doing a lot more of their “window shopping” online. People will still go see properties, they just won’t see as many.

It’s more important now than ever for realtors to put out quality marketing. When you’re looking for an agent to help you sell your home, you need someone who offers a really good marketing package with professional photos, a virtual tour, floor plans and a 3D walkthrough.

Other elements of the transaction will shift as well. Lawyers have been doing virtual signings, and lenders are moving in that direction, too. Every part of the industry is doing what they can to go virtual – quarantine has opened people’s eyes to what's possible and what will offer a better experience for customers.

Q: Do you think buyers will be looking for different features in their condos in a post-pandemic world?

A: For sure. With people working from home more and going out less, space will be more of a want. But in a city like Toronto, affordability will continue to be a factor. People will buy as much space as they can afford, and for a lot of buyers, a home office with a door won’t fit the budget. I think the trend for buildings like Central Condos at 38 Widmer that offer shared “coworking” spaces will definitely get stronger.

Q: Will developers be more likely to build larger units with offices post-COVID?

A: Although that sounds like it would totally make sense, I really doubt COVID will have much of an impact on unit design. The majority of pre-construction units are purchased by investors, and developers build what those investors will buy – smaller, less expensive units that are easy to rent, put on the short-term rental market, or resell for a profit.

As purchasers, end users are really in the minority, mostly because they find it too hard to make such a major purchase based on a floor plan and a price. And while investment demand is certainly down during COVID, investors are still the ones buying up most of the pre-sale units. So unless that buyer mix changes, I don't see any big shifts in this respect.

Q: In the Spanish Flu pandemic, half bathrooms became the norm so people could keep visitors out of their main washroom. What changes do you think we’ll see after COVID?

A: Touchless faucets and smart home features you can control from your phone – I’m sure those will be big. People already wanted that, and COVID has brought it more to the forefront. Maybe now developers will be more likely to include them or speed up their plans around them a bit more.

How we help you stay safe during COVID and beyond

Real estate is an essential service throughout the pandemic, and now that we are seeing the light at the end of the tunnel, we are still here to help you buy, sell, rent and invest - and provide the insight and guidance you need to make smart decisions.

Since we aren’t quite out of the woods yet, our agents continue to follow all health and safety best practices, and have all been fully briefed on all health measures for in-person visits. Beyond that, they can complete your entire transaction electronically, including paperwork, mortgage and legal transactions.

All agents who book showings on our listings must confirm that they and their clients have agreed to the following terms:

  • They aren’t showing any symptoms of COVID-19.

  • They haven’t come into contact with anyone experiencing COVID symptoms, who have tested positive in a COVID test or who are waiting for the results of a test.

  • They haven’t travelled outside Canada in the last 14 days or been in contact with anyone who has.

  • They have viewed the property online first before an in-person visit.

  • They will respect physical distancing guidelines of 2m / 6 ft.

  • They will not use washroom facilities, touch any surfaces including light switches and interior door knobs.

  • They will wash and sanitize their hands prior to entering the home and wear masks throughout the visit.

  • They will space out showings and limit the number of people at each showing to one family group at a time, limited to the contract parties.

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