Homebuyers were out in full force again in January, snapping up 6,928 homes across the Toronto region. And, according to a new forecast, this momentum out of the gate is expected to persist throughout the entire year.
The Toronto Regional Real Estate Board (TRREB) released its 2021 Market Outlook this week, predicting that low interest rates, incremental economic improvements and widespread vaccine distribution will keep the housing market hot.
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If the Toronto region meets or surpasses TRREB’s home sales forecast of 105,000 transactions for 2021, it will be the second-highest sales total ever recorded for a single year, coming in behind only 2016, when 113,133 homes changed hands.
The tremendous run-up in home sales and price growth over 2015 and 2016 eventually led the provincial government to roll out its Fair Housing Plan in an effort to tamp down what it deemed to be runaway activity in the real estate market.
After the policy-induced slowdown in sales and price growth from 2017 to 2019, market commentators believed the Toronto region’s housing market was ready to take off again in 2020. Of course, this prediction ended up being true, but didn’t play out in a way that anyone could have predicted. Home sales fell off a cliff through the first spring lockdown and then skyrocketed to record levels in the second half of the year.
While 2021 is sure to be another unusual year, with the pandemic’s effects still very much impacting the housing market, it has at least become a bit more predictable.
Beyond home sales continuing at a robust pace, the average home price for the Toronto region is expected to surpass $1 million. TRREB says this will mark the first time the selling price for all property types and areas combined will exceed this level on a calendar year basis. The average price is forecast to hit $1,025,000, for an annual increase of 10 percent in 2021.
The board also believes the rate at which new condo listings are hitting the market will decelerate by the second half of the year, while single-family home listings will continue to be low relative to demand.
“The key challenges to the housing market over the next year and beyond will be a familiar one: lack of supply,” wrote TRREB in the report.
“Policymakers at all levels of government have acknowledged the need for a greater supply of housing and a greater diversity of housing types.”