Toronto’s condo market is expected to record slim price appreciation in 2021 as the hangover effects from the pandemic continue to impact buyer demand, especially in the core of the city.
In a report published Monday, Royal LePage outlined its price forecasts for both the condo and single-family markets in the Toronto region.
In its forecast, the brokerage said the median price for a Toronto region condo would increase 0.5 percent next year, with prices increasing more in the 905 suburban regions and declining in the 416. Buyer demand will be more concentrated in the suburban areas because of a prevailing preference for larger unit sizes.
Housing Market News Alerts
Sign up for news alerts on the Toronto housing market
The surge in listings that the 416 area is currently experiencing shouldn’t have a significant impact on prices in the short-term, and by the second half of 2021, buyer demand for resale condos should rebound thanks to the Canadian government’s increased immigration targets and post-secondary student renters returning to in-person classes on city campuses.
Underscoring the point about demand returning, Royal LePage Vice President Debra Harris said that young people who lived with their parents and saved money during the pandemic will likely want to return to city life once vaccine distribution is ramped up next year.
Harris anticipates that this group will drive demand for condos in the city and absorb the higher-than-average inventory levels currently on the market.
“For the many young professionals who were discouraged by strong competition in the condo market in previous years, this window may be their opportunity to find a home they can get excited about living in,” said Harris.
As has consistently been the case through the post-spring lockdown period, it’s a very different story for the single-family home market.
Royal LePage forecasts a 7.5 percent increase to Toronto region single-family homes for 2021, with the median price of a two-storey home rising to $1,185,000. Viewing the market as a whole, the brokerage is expecting a 5.75 percent home price increase, so it’s clear just how much of the heavy lifting the single-family home market is doing relative to condos.
“Single family homes remain in high demand. We expect lighter activity as we near the winter holidays but if inventory does not improve in early 2021, we could have another year of strong price appreciation,” said Harris.
She went on to note that low single-family home inventory would drive prices up, but sales could slow if supply continues to decline.