Home sales across the Toronto region recovered to near pre-pandemic levels in June, with activity only down 1.4 percent from the previous year and up 89 percent over May.
While many wary homebuyers and industry professionals took solace in the encouraging headline numbers, a deeper look into the June data reveals an apparent shift in buyer preferences and market dynamics that has arisen as a result of the pandemic.
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In a note published last Friday, researchers at Ryerson University’s Centre for Urban Research (CUR) wrote that it’s evident the suburban markets surrounding Toronto have been outperforming the city itself through the region’s nascent housing market recovery.
Much of this strength in the Toronto region’s suburban markets, referred to collectively as the “905,” is due to buyer demand for single detached homes and townhomes. Sales in the 905 detached home and townhome markets both surpassed their pre-pandemic levels in June, wrote CUR researchers Diana Petramala and Victoria Colantonio.
The strength in the 905’s detached and townhome market segments was enough to propel home sales in the suburban region upward by 10 percent in June over the previous year. Meanwhile, total sales fell 11 percent in the City of Toronto during the same period.
Petramala and Colantonio also noted that the share of homes sold in June that were located in the 905 hit a 20-year high, further indicating a shift in buyer focus to the suburbs.
The weakness in the City of Toronto market can be pinned on condo sales, which fell 21 percent in June over the previous year.
“The overall condo market is still holding in what is considered a seller’s market, which is supporting positive gains in average sale prices. But, changes in months of inventory show that the condo market is loosening very quickly, while all other markets are tightening,” wrote Petramala and Colantonio.
The researchers noted that active listings for condos in the City of Toronto were up 20 percent over the previous year. Speculating as to why listings in the condo market are seeing a more pronounced rise, Petramala and Colantonio wrote that units previously used as short-term rentals on Airbnb may be ending up on the resale market as new regulations from the City take hold.
Looking forward, the CUR researchers believe the condo market will be an area of weakness in the broader market through at least 2021 as immigration also falls due to the pandemic and the condo rental market takes a hit.