Toronto

Your definitive guide to today's Toronto housing market

Your definitive guide to today's Toronto housing market

Your definitive guide to the Toronto housing market during (and after) COVID-19

Things have changed a lot over the last few months, and 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 stats and insights: what you need to know

Toronto Area Illustration

Toronto Condo Market Reports for August
Toronto Market Reports for August

The rebound continues in the GTA, with record-breaking home sale results in August! Residential sales went up 40.3% year-over-year. Sales are up for all major home types, with the main drivers being detached, semi-detached, and townhouses in both the 416 and 905. With very low borrowing costs, the noticeable increase in jobs and more people opting out of vacations to stay in the GTA, we've seen an increased demand for home ownership.

The condo market is a little softer

In the condo segment, there is price growth, but it’s slower, with new listings far outpacing sales. The overall average selling price was up by a whopping 20.1% over August 2019, with the major contributor to this being the strong increase in sales for detached and semi-detached homes in (more expensive) Toronto versus the other GTA regions.

Overall, we expect to see further recovery in the market right into the fall.

It’s a renter’s market
Available rentals have skyrocketed. There's a ton of supply and far less demand – units are sitting empty and prices are falling. There are a few reasons for that:

  • People in industries and demographics that are more likely to be renters have been hit harder than most by pandemic-related job losses.

  • Immigration has slowed down to a trickle. Many newcomers rent when first arriving in Toronto, but with border closures, immigration has come to a standstill, putting a big dent in demand.

  • Hundreds of Airbnb units have hit the long-term rental market, adding to the supply glut.

  • College and university students are staying home this fall. That’s another huge chunk of the rental market. With schools going virtual for the fall semester and possibly beyond, that opens up a huge number of units across the GTA.

With high supply and low demand come falling prices: the average price for all unit sizes across the GTA is uniformly down. If you want to take a deeper dive into the numbers, this TD economic report takes a close look at supply and demand in the Toronto housing market and what things could look like to the end of 2020 and beyond.

Get the scoop on rental prices and demand by area:

Toronto
Mississauga

Mississauga housing market stats

Mississauga
Mississauga condo market snapshot
Mississauga overall market snapshot

Mississauga’s breaking records too

Mississauga's July records for freeholds were smashed again. Average prices ticked up another 2% in August, adding to the 4% gain we saw in July. Sales blew up with a 141% increase over July, which you could see in many neighbourhoods where homes that had been on the market multiple times finally had buyers.

It would be safe to say that if you wanted to sell your house in 2020, August was the time to do it. This includes the luxury segment, with 69 units priced over $1.5 million sold, right up there with the 70 sold in July.

However, like the 416, the condo segment in Mississauga is responding to COVID in a different way than freeholds. Sales are down by 14% year-over-year, with 224 units sold vs. 269 last month and 260 last August. Prices have been amazingly resilient, though, and we saw a modest month-over-month price increase of 1.5%, and a 12% gain over 2019.

Condo townhouses are still a popular bet: 169 units sold in August (vs. 161 in July), and the city hit a record-high average price of $671,000 and a year-over-year gain of 7%. These days, buyers are choosing townhouses over condos and that’s reflected pretty clearly in the numbers.

Investors are slow-playing this market, waiting for the fallout we’re likely to see as the mortgage deferral program comes to an end. Buyers will find plenty of choices, with prices swinging in their favour. The opinion in real estate circles is that the delayed spring market is wrapping up, and we will see a continued slide in condo sales in Mississauga until buyers and investors start buying condos again.

Is now a good time to buy or sell?

It’s a GREAT time to sell a house - and an excellent time to buy a condo. If you’re selling a detached or semi-detached house or townhouse in the 416 or the 905, this is the time to do it. Demand is crazy and prices are breaking records all over the place.

However, the story for condos isn’t quite the same: supply is outpacing demand. Airbnb investors have put their vacant units on the market, new investors aren’t buying because both rents and demand for rentals have dropped and they won’t be able to cover their costs, students aren’t moving to the city (so their parents aren’t buying them condos), and the halt in immigration has taken a huge pool of potential buyers out of the mix.

So for the condo market, it’s a great time to buy, especially if you plan to live in the unit yourself, or you’re able to carry an investment for a while without renters.

Related info: Bidding wars and bully offers: strategies for success

One thing to remember, however, is that we haven’t seen what the long-term effects of COVID will be. Things are constantly changing. Once mortgage deferrals have ended, and we see what long-term unemployment numbers look like, that could cool what’s currently a very hot freehold market. More properties could come up for sale as financial difficulties force homeowners to sell, not to mention unemployment, decisions to leave the city due to the ability to work from home, and reduced immigration, shrinking the pool of potential Toronto buyers.

Renting during (and after) the pandemic

Now that there are suddenly so many rental properties available, how do you go about apartment hunting during COVID? Should you? Or is it better to wait it out and resume your search when you feel more comfortable checking out apartments? That completely depends on your needs.

Prices are dropping, so you could get a deal.

Prices are lower across all bedroom sizes for the last quarter. Listings for “furnished condos” (code for former Airbnbs) are popping up all over the place, and especially in the downtown core. New listings are on the rise, and prices are dropping, but most units still aren't getting snapped up, despite being a better deal. Affordability is an issue, students aren’t going back to school, and some are just waiting until it feels safer to move.

If you do feel comfortable moving, you can probably get a nicer unit for less than you’re paying now. Plus, with the glut in supply, you may even have some leverage to negotiate a lower-than-posted rent. When you spot a unit that you want to snap up, you can use our new digital offer feature (you’ll see it as part of each listing) to start the progress of putting in an offer with an agent right away.

There’s no rush.

If you don’t want to move now, it looks like the Toronto market will favour renters for a while, especially with the pandemic’s economic impact on industries that have high rates of renters, and the fact that students aren’t moving in for the school year anytime soon.

Cannot force eviction

Read more: COVID-19: Tenants' rights and responsibilities explained

Being a landlord during the epidemic

If you own an investment property, the pandemic has likely made your life harder. If it's a short-term rental, it's probably sitting empty. And there’s a good chance that even your long-term units aren’t in big demand, since the rental market has softened considerably.

And if you've got long-term tenants who have lost their jobs, it's very possible you could be facing a stretch where they're unable to pay their rent, which means you won't have that money to pay your mortgage. If you’re able to make an arrangement for them for partial rent or some other alternative, that may be in everyone’s best interest. However, if they can afford to pay their rent, they should still be paying it: the measures the government has put in place are not meant to be a rent-free holiday for all tenants, just a way to help those in need. If they genuinely can’t afford it, you can defer your mortgage payments: talk to your lender about details.

The ban against evictions has been lifted, but there’s currently a 6-12 month backlog for eviction cases to be heard, so if you want to get tenants out, it could take a long time.

Own an Airbnb

Own an Airbnb? A few things to think about.

Your investment probably isn't bringing in much money right now – a lot of Airbnb owners are panicking about the loss of tourism and the state of the short-term rental market. At this stage, you’ve got a few options:

  1. Rethink your marketing: a lot of Airbnb owners have been marketing their units as comfortable places to self-isolate. Others are targeting health care workers who don't want a long commute and/or don't want to bring the virus home to their families.

  2. Make people feel safe. Toronto attractions are open and local travel is starting to increase. To attract visitors, remember that you’re competing with large hotel chains with the means to make big (and often expensive) changes around hygiene, cleaning and social distancing measures. Make sure your listing addresses people’s concerns: talk about what you’re doing to ensure they stay safe while staying in your unit (think cleaning protocols, longer times between visitors, social distancing measures in buildings, etc.). Those that go above and beyond will be a lot more likely to get what business there is.

  3. Wait. COVID-19 won't last forever, and tourists will come back to Toronto eventually - local travel is already on the rise as people “staycation” close to home. If you can afford to, sit tight for a while longer. And remember, you can defer your mortgage payments while that’s still available – that option is available to landlords and homeowners alike.

  4. Try renting it for a longer-term lease. However, keep in mind that there aren't a lot of people out there looking to rent right now (demand is WAY down, and supply is up).

  5. Sell. Chances are, you won’t be able to unload your unit at top dollar. Right now, there are a lot more condo listings than condo buyers (unlike the market for houses), and while units are certainly selling for marginally more than they were going for in August 2019, they are not fetching the prices they did right before COVID. Buyers know this, and they are negotiating and often coming in under asking.

Zoom meeting

How COVID has changed real estate

Buying a condo in Toronto looks different now, and a lot of the changes we’re seeing are likely to permanently impact the way homes are marketed and sold.

You’ll spend more time online and less time in person.

People want to minimize their exposure to others (and to other people’s living spaces) so now most of your decision-making will likely be based on virtual tours, floor plans, photos and the expertise of your Condo Pro.

Basic listings with iPhone photos just won’t cut it now, since they don’t provide enough information to narrow the search, 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. With Google Classroom and Zoom work meetings, you know how powerful virtual gatherings can be. Seeing a home that way is no different, and it’s enough to help you decide if you're seriously interested in a property. 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, is finding ways to enable transactions online. From using digital signatures to pushing more and more information 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 new 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, 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.

In-person visits require masks, sanitizer and a health declaration.

Everyone is taking whatever precautions they can to stay healthy and protect the people around them, too. Practice physical distancing, don’t touch any surfaces and follow all the usual protocols (they should be pretty familiar by now…)

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

Rules on keeping safe

Moving during COVID – tips for staying safe

Moving is super-stressful at the best of times. Add in the small matter of a highly infectious illness, and you’re really piling on the fun. If you don’t have to move, stay put until this is all over. But if you’ve bought or rented a new place, here are a few tips for staying safe as you move your stuff.

  • Order your supplies early – it’s taking longer to ship online orders these days, so build in extra time.

  • Order boxes instead of getting them from friends or the LCBO (COVID can live on cardboard for 24 hours). This calculator can help you figure out how many you’ll need.

  • If you’re using movers, make sure they’ve got proper sanitation/safety measures in place.

  • If you rent a truck for a DIY move, wipe down all high-touch surfaces and make sure everyone who’s helping you has masks and gloves.

  • Keep the move to less than 5 people in one space, and minimize contact wherever possible.

  • Stock up on hand sanitizer, hand soap and paper towels, and have a dedicated washroom the movers can use.

  • Disinfect frequently touched surfaces like doorknobs and faucets throughout the day.

  • Let both sets of neighbours (current and future) know when you’re moving so they can avoid unnecessary contact.

  • Deep clean your new place before moving in, or wait 14 days after taking possession.

  • And if you or anyone else in your family is sick, reschedule the move.

For more details, read 8 tips for moving during quarantine – it’s got some great info, as well as a handy supply checklist to keep you organized and ahead of the game.

How the government, lenders and the City of Toronto are helping homeowners

Mortgage deferrals

While unemployment rates are dropping, a lot of people still don’t have jobs, have had to change their employment status to take care of kids or elderly parents, or they’re working reduced hours. And while EI and CERB are a huge help to many, they don’t even come close to being able to carry a Toronto property.

Mortgage deferrals are helping a lot of people survive the economic downturn. If you’re having trouble paying your mortgage, you may be able to defer your payments. Eligibility and length of deferral will depend on your lender, so ask them for details.

Read more: Mortgage deferral FAQ from the CMHC

It's important to note that you are NOT permanently off the hook from paying ̶ it's just a delay until the crisis is over and you can afford to get back to making payments. The interest doesn't stop being charged: all a deferral does is extend your mortgage, which means you'll end up paying more interest in the end.

But despite what you may have heard, that interest will NOT add up to thousands and thousands of dollars: deferring your mortgage is certainly cheaper than, say, getting a cash advance on a credit card, or getting an online loan. It will take you a bit longer to pay it off, yes, or will require a few bigger payments, but it may be worth extending it to give you some peace of mind now.

So bottom line? If you need to defer, then defer. The interest will not be significant, and if it helps you keep your family fed, clothed and in good emotional shape, it’s worth it. Just remember it's not free money: you will have to pay it back sometime.

Dustan Woodhouse, President of Mortgage Architects, sums up your options very clearly in this 7-minute video (worth watching!)

Do the math: Deferred mortgage vs. credit card cash advance

deferred mortgage vs. credit card cash advance table

Lenders are doing their part to help, too.

In addition to mortgage payment deferrals, your lender or mortgage broker may have other options to get you through the next few months. Talk to them about loan re-amortization (extending the original repayment period to make monthly payments lower), converting from a variable to a fixed-rate mortgage to protect from any sudden interest increases, or making other special payment arrangements.

Your ability to pay back your loan is in their best interest, so it definitely doesn't hurt to talk to them about options.

The City is helping too.

Whether it's extending deadlines for your property taxes, deferring payments on utility bills, or encouraging landlords to go easy on tenants who can't pay their rent, Toronto has stepped up with a number of relief measures. Get the details here.

A: The market is hotter than it’s ever been. People have obviously gotten comfortable with the new normal. We've seen the number of listings and transactions go up every week since the market’s lowest point, which was the second or third week of April. Based on what we’ve seen over the last couple of record-breaking months, I think the upward trend will continue, but let’s not forget one thing: it could all change very quickly again. Just look at the spikes in COVID cases in the US right now, with some states going back into lockdown. A situation like that would likely drive us back to mid-April levels.

A: Some of the things agents have implemented in the short term are here to stay – 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.

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.

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.

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.

Want to know more?

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