by Nutan Brown
on Tuesday, January 5th, 2021 at 8:37am.
With 2020 now behind us, we look forward to 2021 and what is expected to be a more “normal” year for Toronto real estate. While we can’t be certain exactly what this year has in store, we can predict based off recent trends what is likely to happen.
According to a recent Royal LePage report, home prices are expected to rise in 2021, building on the unexpected growth experienced this year despite the pandemic. The report forecasts a 5.5% increase in the average sale price of Toronto homes, driven by a shortage of properties for sale and record low interest rates.
The report also suggests that the aggregate price of a home nationwide is set to rise year-over-year to $746,100. The median price of a two-storey detached house and condominium are projected to increase 6% and 2.25% to $890,100 and $522,700, respectively.
Sales are expected to ease back towards more typical levels on a month-to-month basis. Unlike the sudden halt experienced last spring due to COVID19, we are likely to see a more normal spring market in 2021, which is expected to be a seller’s market.
According to Royal LePage CEO Phil Soper, “The leading indicators we analyze are pointing to a market that favours property sellers in the all-important spring of 2021. Across the country, a large number of hopeful buyers intent on improving their housing situation were not able to find the home they were looking for this year, as the inventory of properties for sale came nowhere near to meeting surging demand. With policy makers all but promising record low, industry supportive interest rates to continue, we do not see this imbalance improving in the new year. The upward pressure on home prices will continue."
The shift to large single-family homes is expected to moderate as life returns to normal, easing some of the pressure on the condo markets. The demand for condos in most of Canada’s biggest cities is likely to improve, driven by first-time home buyers and immigrants coming to the city.
While some would-be sellers will remain cautious to start off the new year, the advancing medical science and surging housing demand will be the main drivers to a hot year for Toronto real estate.
If you are thinking of entering the housing market this year, feel free to contact me anytime for some professional guidance and advice.