A year ago, Toronto’s typically busy spring market was thrust into uncertainty as COVID-19 spread across the country — a province-wide lockdown quickly tanked sales, halted open houses and shuttered pre-construction presentation centres.
A year later and the spring market for 2021 is already shaping up to be quite different.
In its latest market report, the Building Industry and Land Development Association (BILD) said that the new construction spring market will produce its usual seasonal increase in sales activity along with additional supply in the form of new launches. In February, 3,240 homes were sold across the Toronto region, nine percent above the 10-year average but 34 percent below the number of sales recorded in February 2020. Condo sales outperformed their single-family home counterparts by a narrow margin, posting 1,623 sales compared to 1,617 single-family transactions.
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Although the report acknowledges that pandemic-influenced economic challenges could create obstacles in the near future, new construction experts say that they are well prepared for the multitude of scenarios that could play out this spring.
“The industry has adapted really well. It’s all about the adaptation from in-person to virtual marketing and brokers, as well as purchasers [who] have modified their methods very successfully,” said Mike Bowering, President of Mutual Developments.
“We at Mutual [Developments] feel we are well prepared for whatever the spring market holds [regarding] COVID-19 and are not only creating a sales office, albeit smaller, but are completely capable of marketing and selling online,” he added.
This year, Bowering explained that consumers can expect a lot of choice. However, due to the rising costs of building materials, prices aren’t expected to go down, but rather trend upwards. In its February market report, BILD revealed that prices for single-family homes and condos had increased by 25.1 percent and 8.4 percent, respectively, over the past 12 months, bringing the single-family benchmark price to $1,373,473 and the benchmark price for new condos to $1,042,064.
While condo sales in downtown Toronto have performed well over the past five to seven years, Bowering says that this trend has also moved into the ‘905’ region in areas like Mississauga, Markham and Vaughan.
Mark Cohen, Co-Founder and Managing Partner of TCS Marketing Systems, says that his market research team has also identified communities in Scarborough, Barrie, Whitby and Etobicoke that are optimal for property investors this year.
“New construction buyers and sales professionals have many spectacular communities, suite designs, and locations to choose from in 2021 in [the] low-, mid- and high-rise segments,” said Cohen.
While the resale market continues to see extreme levels of activity and price gains in the GTA’s suburban regions, Bowering expects that the trend of buyers moving out of the city will start to reverse, with the desire to be close to work, he says, being one of the main driving factors behind the return to the city.
“All the openings we are seeing are indicative of the demand and the condos in the central areas are a convenient place to live — close to where people work,” said Bowering. “In fact, they are becoming more appealing than single-family homes because of their proximity to work.”
As the province battles its third wave of COVID-19 cases, government-imposed restrictions will prevent in-person launches and events from moving forward for the foreseeable future. Developers and their sales teams will continue to launch and sell projects mostly virtually, while getting creative with their marketing approach.
Cohen points out that the level of sophistication that creative agencies have been implementing recently when it comes to digital interfaces and online user experience has been “awe inspiring.” Bowering explains that sales and marketing programs will need to be sensitive to their target audience in order to sell their product this spring.
“Marketing and sales programs are becoming more creative in their approach to reaching their target groups, many of whom are purchasing from the comfort of their homes,” he said.
Although the latest lockdown and the wave of rising COVID-19 variant cases could have an effect on the market, Cohen says that his team at TCS Marketing Systems is ready to face any curveballs.
“The pre-construction industry, as much as it is underpinned and driven by economic key performance indicators, is also an industry interwoven with the ethos of delivering a better tomorrow,” said Cohen.