For the first time in history, Toronto homes have hit an average selling price of over $1m. We’ve all seen the headlines: “Toronto Real Estate Bubble? Try Affordability Crisis.” “Toronto housing prices have become detached from reality.” “TRREB Predicts Surging GTA Real Estate Market for 2021.”
People aren’t getting paid more money….. so what’s driving this? As it would appear, most of the job losses occurred in lower income-earning professions, who would likely not be home buyers even before the pandemic. And for those with mid-level or higher paying jobs, their demand to trade-up is fuelled by change is lifestyle. Working and schooling from home means that many need larger homes! Or, if not having a daily commute to the office is now a permanent thing, why not move to the ‘burbs and get more house for your $$? OR heck, move to cottage country and enjoy a swim or ski when your work day is done?
We’ve got almost “free money” with mortgage interest rates hovering around 1.5%. Prices may be up, but affordability is perhaps the same.
There are some of us here in the trenches that feel that the market has slightly shifted in the last couple of weeks. We’re seeing a bit of buyer fatigue, and we’re seeing more houses come on the market. With more inventory to choose from, buyers may see prices levelling out over the next couple of months.
But with more people being vaccinated and immigration expected to pick up over the next three years, there’s no long-term relief in sight without adding more housing supply to the GTA housing market.
Click here for a detailed summary of the Toronto Regional Real Estate Board’s monthly results. Would you like to understand property values in your neighbourhood? Let’s have a coffee ☕ (or wine?) over zoom!