There’s no denying that Covid-19 had a dramatic impact on Toronto’s housing and condo market, and at this time last year, no one could have predicted what would happen next: a deep but very temporary blip in market activity in the spring, followed by a summertime boom in some property segments and a bust in others. A number of factors were behind the shifting market, leaving many wondering if this is a long-term trend or just another “blip” on the radar.
Let’s look at the boom (in detached houses) and the bust (in downtown condos), and why this trend is not here to stay.
Once the initial shock of social distancing and remote work sank in as a new reality (at least for the time being), buyer interest spiked in suburban and rural communities across Ontario – a trend seen in other provinces as well. More square footage, larger homes and lakefront locations offered homebuyers relief from expensive and dense downtown living.
As home-grown demand for downtown condo living began to wane, demand also dried up from immigrants and tourists (due to border closures), student renters (with colleges and universities closed to in-person learning) and property investors, who all of a sudden found themselves unsure about the rentability of their downtown units.
Condo owners started listing. Meantime, all those brand new condo units that have been under construction continued to come on stream.
But much like the overall market lag last spring, the fall market saw condo activity slow to a crawl and pick up again in a span of just two months. By the end of the 2020, investors and end users started to come back, hoping to cash in on heightened supply, lower prices and greater negotiating power.
Now, with the first month of 2021 under our belts, the Toronto condo market has officially come roaring back. Quite simply, housing supply in the GTA and Ontario is at an all-time low, and condos are once again becoming the go-to for buyers. In January 2021, Toronto condo sales were up 85% year-over-year, according to the latest data from the Toronto Regional real Estate Board. Prices were down 8%, but if sales continue at their current pace, prices will bounce back.
Add to this the following fact – the Covid-19 vaccine is on its way and life will return to a version of its former self. Yes, downtown workplaces, schools and borders will reopen, and condo demand will come back with a fury. Add to this the federal government’s plan to add 1.2 million immigrants into to Canada over the next three years – many of whom will settle in Toronto.
If you’re thinking of dipping your toe in the Toronto condo pool, now is the time. Prices are still down and there’s lots of options out there. The same can’t be said for the detached market at this time with most listings experiencing multiple offers and going well over asking price.
All things considered, the Toronto condo market is still a pretty safe bet ahead.