Toronto Real Estate Predictions for the rest of 2020
August 24, 2020
The numbers are out for July sales and Toronto’s real estate market broke records! 11081 homes sold. In fact, July was a record-setting month across Canada and August is shaping up to be almost as busy. (Shameless self-promotion: I currently have two one bedroom condos for sale and two great lease opportunities. Click here for more).
The big question: What is going to happen during the rest of 2020? If you had asked my predictions (or anyone else) in January, we would have been completely off the mark, but I think that I can make some reasonably accurate predictions now.
Single family homes:
I predict that the single family home market will continue to grow, because a lot of people are itching to get out of their condos. I think there’s some of condo fatigue happening. People really want to be closer to the ground and feel a sense of freedom.
I think that feeling, combined with lower mortgage rates, will continue to move the single family home market forward. There will continue to be multiple offers on very specific types of homes, basically the ones that everybody wants – homes in hot neighbourhoods that are fully renovated.
I think the condo market is going to see a minimal amount of growth during the rest of the year. One reason is that nobody is renting Airbnb’s. Investors that owned condos being rented out on that platform are now trying to either sell or rent their investment properties, which has contributed to a downturn in the rental market and more product coming into that market that’s not renting.
With significantly lower rents, the monthly expenses on investment units are tight – investors may get frustrated by it and potentially sell, which will add to the inventory. Inventory levels are still going to be lower than expected when dealing with a pandemic, but it won’t kill the market. It’ll just be slower.
Escaping the city:
I’m hearing a lot of buzz about people looking to buy property outside Toronto and I think it’s a long-term solution to a short-term problem. Of course, it sounds appealing to get out of the city and have a lot more space, especially when we’re working from home, but once restaurants are open again, as well as movie theatres and music venues, many people who used to live in the core and are now a 90 minute drive away are going to have some regrets. Proximity to the office is only one reason people like to live downtown.
The market as a whole:
I think we’ll have a busy fall market, but the indicators won’t necessarily be there.For example, the number of showings booked for listed properties are way down and open house signs all over the city are harder to find. There will still be agents holding open houses using mandated protocols, but not everybody will feel comfortable holding or attending them. I believe most sellers would prefer not to have an open house for their home… and in all honesty, open houses are a bit archaic and will soon be a thing of the past especially because, with today’s digital marketing tools (video, virtual tours, 3D renderings), it’s possible for people to get a good feel for what a property is like without ever stepping inside it.
The main variable that could affect the market is a potential second COVID wave. It’s not inevitable, but it’s a strong possibility. If the government mandates another lockdown, of course the market will stall again but I don’t think that will happen. As this new normal continues, we continue to know more about the virus, which allows the governing bodies to deal with it in a way that will mitigate any major blows to the economy BUT the threat of economic instability continues and that fear is what may slow a market. Thankfully we have low interest rates and a new qualifying rate for the stress test which will increase affordability and because of that I believe we’re going to see a busy fall.
If you have any questions about the real estate market or are curious about what homes on your street have sold for, please get in touch!
Brian Elder / 416 565 0115 / firstname.lastname@example.org