Looking into the crystal ball…
2019 was a year for stabilization after the regulatory changes, the mortgage ‘stress test’, and rising interest rates of 2018 that sought to slow the 30% rise in prices in 2017.
With that year of relative stability, sellers’ expectations adjusted to not realizing yet another year of 30% increase in value, and buyers have come to understand that the bubble is not bursting and waiting to buy isn’t a strategy that will pay off – in fact, prices rose 4% in the GTA overall.
We predict 2020 should be a year of stabilization and modest but solid gains. According to Re/Max Canada, Toronto is set to experience a strong housing market in 2020. Lower unemployment rates, economic growth and improved overall affordability in the Greater Toronto Area are expected to drive the market forward.
The estimated average sale price increase for 2020 is six per cent, two points higher than the growth experienced between 2018 ($736,256) and 2019 ($766,236).
While Toronto is experiencing its “busiest” construction season ever, housing supply still falls short of the demands of the city’s rapidly growing population.
Currently there are two months of inventory, and these conditions are expected to prevail in 2020. Move-up buyers will drive demand in 2020.
Growth of the Toronto luxury housing market continued to thrive in 2019, with the sale of homes over $5 million rising by 8.5 per cent year-over-year. Growth in this property segment is expected to continue in 2020.
Interest rates and employment/income growth will have the greatest impact on the market in 2020.
The political climate in the U.S. may prove interesting depending on its impact on the economy and all eyes are on China as the Coronavirus impacts the region, impeding travel and export, which may eventually result in a trickle down effect economically.
While many people hold off until the traditionally popular ‘spring market’ we encourage sellers to think outside the box – there are so many buyers out there hungry for new listings that sellers can achieve great outcomes in the start of the year.
In the east end, we’re already seeing a lot of activity – a condo recently garnered 44 showings in one week and 11 offers for an ultimate sale price of 129% of asking!
The east end remains incredibly popular with home buyers and is typically resilient to negative market conditions experienced in the greater Toronto area. Anyone who lives here already knows…we have the best of both worlds: the city within reach of a tight-knit community with everything to offer!
2020 has started out with a bang in the Toronto housing market. With supply still on the low side, the price of detached homes specifically has seen considerable growth year over year, with the average reaching $1,369,848 – a 17% increase from January of 2019, while the average cost of a home across the 416 is now $839,363 (all home types). This is largely due to buyers resurfacing after the OSFI stress test was put into place last year. As we move further into February, and then into the popular Spring market, supply will increase, but may still not match the demand, given Toronto’s growing population, lower unemployment rates, and positive economic growth. In other words – we’re still foreseeing a seller’s market, with homes and condos garnering multiple offers and sales above asking prices. That being said, we are also seeing a huge influx of new build condos, creating greater opportunity for first time buyers to get into the market, as well as a larger supply for downsizers to choose from and customize to their needs, which could be ideal for the aging portion of our population. Overall, we predict 2020 to be a year of positive but modest growth!