The housing supply shortage is the prevailing theme in the Toronto housing market, much like the rest of Canada, where seller’s market conditions are present in 26 of 29 regions analyzed in the RE/MAX Fall 2021 Housing Market Outlook Report.
These conditions are expected to continue in the fall, particularly as COVID-19 restrictions continue to ease. Cameron Forbes, broker at RE/MAX Realtron Realty Inc., says open house activity this fall will be a good indicator of market strength, and a gauge for the level of confidence in the market among both homebuyers and sellers.
Young families are expected to continue driving demand in the Toronto housing market, with first-time and trade-up buyers active in the region.
Single-detached homes have seen the largest increase in average residential sale prices, up 14.6% year-over-year. Meanwhile, townhomes saw average price growth of 10.6 per cent; and condo prices increased 4.2%.
Total unit sales are across all property types are up by 28% in 2021 versus 2020.
The average price in the Toronto housing market is expected to increase by 7% by the end of 2021.
Looking at the bigger picture, Ontario real estate has seen some of the highest single-detached price gains in the country, with 13 out of 16 Ontario housing markets examined in the report seeing growth between 20% and 35.5% year-over-year. The outlier markets that experienced price increases below 20% include Toronto (+14.6%), Thunder Bay (+17.1%) and Mississauga (+19.7%).
Meanwhile, condos and townhomes in some smaller and suburban Ontario housing markets such as Kitchener, North Bay, London, Peterborough, and Southern Georgian Bay, experiencing a higher price surge year-over-year. The estimated price outlook for the remainder of the year ranges from a 2% price decrease in North Bay, to increases across the other regions ranging between 2% and 15%.
National Canadian Housing Market Trends
Conditions in the Toronto housing market are echoed across the rest of the country, with single-family homes seeing the most pronounced price increases year-over-year in 2021, rising between 6.8 and 27.3 per cent across 26 or 29 markets surveyed in the report. And much like Toronto real estate, activity in this property segment is being propelled by strong demand by young families, a trend that RE/MAX brokers and agents expect to continue through the fall.
The average residential price in Canada, across all housing types, is anticipated to increase by 5% in the remaining months of 2021.
“Housing activity throughout the pandemic has remained strong, so it comes as no surprise that the outlook for the remainder of the year continues on an upward trajectory, which is great for homeowners and their equity, but challenging for first-time buyers who have been priced out of the market,” says Elton Ash, Executive Vice President, RE/MAX Canada. “We must continue to educate Canadians from a practical, real world, point of view. What is affecting the Canadian housing market right now? Low Interest rates, economic stimulus, higher home-buying budgets, a higher savings rate, homeowners too scared to sell, and not enough new construction. These factors have created current market conditions.”
Adds Alexander, “The Canadian housing market has historically given homeowners great long-term returns and solid financial security, but there’s no doubt that the rapid price growth we’ve experienced recently is cause for concern. However, it’s not cause for panic. The data shows single-detached home price acceleration may be starting to level off in some urban centres, but prices continue to rise in many smaller cities and communities that were once havens for affordability. Real estate has been a boon to the Canadian economy, during the pandemic and before it. We believe in the long-term health of Canada’s housing market, but in order to protect it, we need to acknowledge and address the housing supply shortage. Our current government needs to stop applying band-aids and cure the problem at its root.”