How can GTA real estate thrive in the middle of a pandemic? Over the last year, as the economy was brought to an abrupt pause resulting in millions of job losses, the Canadian housing market flourished. Prices and sales activity roared like never before, setting new records fuelled by historically low interest rates, pent-up demand, and new home-buying trends.
To get a sense of just how red-hot the housing market is in the Toronto region, take a peek at this statistic: since the start of 2021, about 4,000 GTA listings have sold for over 110 per cent of the asking price.
The consensus is that the housing sector, whether it is the GTA real estate market or that of the Okanagan Valley, will continue to surge in 2021. The Bank of Canada (BoC) is not expected to normalize monetary policy for another year, the federal government will inevitably maintain its fiscal stimulus and relief measures, and borrowing will continue to be cheap. This is all great news for prospective homebuyers.
With that being said, buyers should anticipate bidding wars and bully bids, not only within the real estate markets of major urban centres like Toronto, Vancouver and Ottawa, but also in smaller suburban markets. Does this apply to the Brampton real estate market, too? Absolutely.
Like in other parts of Canada, Brampton is facing rapidly declining housing stocks and strengthening demand, allowing the municipality to see home prices cross the $1 million threshold.
GTA Real Estate Trends: Brampton Housing Market Soars into 2021
According to the Toronto Regional Real Estate Board (TRREB), Brampton residential sales surged 51.53 per cent to 1,135 in February, up from 749 in January. The new year certainly hasn’t slowed the momentum that gained force throughout 2020.
The Brampton real estate market saw its average housing prices top the $1 million mark in February. The latest TRREB data found that the average price rose 4.4 per cent to $1,014,232. Here is a breakdown of the prices of property types across Brampton:
- Detached: +1.47%t to $1,185,341
- Semi-Detached: +1.59% to $895,546
- Townhouse: +9.26% to $669,670
- Apartment: +1.2% to $484,554
“It’s clear that the historic demand for housing experienced in the second half of last year has carried forward into the first quarter of this year with some similar themes, including the continued popularity of suburban low-rise properties,” said TRREB president Lisa Patel in the organization’s monthly GTA market analysis.
Could the Brampton housing sector see sky-high valuations ease in the coming months? In 2020, the industry was abuzz with pent-up demand. This year, it is all about listings data and overall inventory levels.
New listings spiked 83.97 per cent to 1,768 while active listings advanced 88.2 per cent to 702. The months of inventory – a measurement of how long it would take to sell current stocks at the present rate of sales activity – was unchanged at 0.9 months.
“In the absence of a marked uptick in inventory, the current relationship between demand and supply supports continued double-digit average home price growth this year,” said TRREB chief market analyst Jason Mercer in a statement.
How Much More Growth is Possible in the Brampton Real Estate Market?
The leading debate within the housing industry and the finance sector is whether Canada is facing one of the biggest bubbles in the international real estate market. A bubble is defined as an asset that experiences rapid acceleration in a short period. While this concept is applied to the Canadian real estate market, there are many factors at play to explain what is going on in the GTA, the Greater Vancouver Area or the Maritimes.
Last year, pent-up demand and near-zero interest rates were the primary drivers of the market. This year, it is a combination of low rates, falling inventories, and strong domestic demand. Until the central bank tightens monetary policy and new supply comes to market, this could be the norm for a while.
Others disagree, however. Scotiabank believes that the federal government will unleash cooling measures as part of its Spring Budget to ensure that the real estate market does not become out of hand, particularly as the economic recovery expands and the country returns to some semblance of normalcy amid vaccine rollouts.
At the same time, the Bank of Canada is welcoming the booming housing sector since this can help the national economy recover in the aftermath of the COVID-19 public health crisis. Though policymakers have also conceded that they will monitor the “overheating” situation as close as possible.
In Brampton and the broader real estate market, it is indeed seller’s territory. In the RE/MAX Brampton Housing Market Outlook (2021), the city is projected to witness growth in multiple areas throughout the year, from luxury properties to entry-level homes to condominiums. The two most significant homebuyers? Young couples and move-up buyers. The former is benefiting from cheap borrowing, and the latter uses the profits from their homes to get more home for their money.