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Average price of a home in the Toronto region increased 13.5% last year

The Toronto Regional Real Estate Board released its 2020 housing figures this week. And I suspect that the numbers are probably directionally similar for many city regions around the world.

2020 saw more home sales than 2019 with 95,151 homes changing hands. This represents an 8.4% increase compared to last year. December was also a record month with 7,180 sales — a 65% year-over-year increase!

The average selling price in the Greater Toronto Area also reached a new record of $929,699. This represents a 13.5% increase compared to last year. Once again, December was a record setting month with an average selling price of $932,222.

When you look at sales and average prices by home type, the biggest drivers were low-rise homes outside of the city. No surprises here.

But consider the price spread that now exists between condos and detached homes. In the City of Toronto (“416”), we’re talking about an average price delta of nearly $850k. That would be an expensive home in many other markets.

Of course, condos tend to be smaller than detached homes. And so different prices per pound. But total price matters a great deal and historically a widening spread has moved many buyers over to the condo market.

Bargain hunting buyers caused condo sales to soar in December: RBC
Condo sales soared across the Toronto region in December, and as one economist wrote, it looked like buyers were out “in full force looking for bargains.”

While roaring detached home sales and skyrocketing prices have stolen the lion’s share of the headlines in recent months, it now appears that condos are mounting a comeback, at least when it comes to sales activity.

After the Toronto Regional Real Estate Board (TRREB) released its December sales and pricing data earlier this week, RBC Senior Economist Robert Hogue wrote that condo sales caught his attention.

He acknowledged that the challenging rental market is still pushing investors to offload their units, causing condo supply to surge and prices to continue to post only modest gains in suburban communities and fall by nearly five percent in Toronto-proper.

That said, Hogue observed that sales spiked 75 percent across the Toronto region, with similar strength seen in both city and suburban markets as “softer condo prices are now drawing more buyers in.”

In 2021, the economist is predicting that condos’ affordability advantage over detached homes will allow demand to pick up even more steam.

Of the four distinct property types tracked by TRREB, only townhouse sales in the region’s 905 area posted higher annual percentage gains than condos.

In terms of overall sales volume, detached homes still significantly outsold condos across the region, but the gap between the two property types narrowed. In November, detached homes outsold condos by 2,190 units at the regional level. By December, the gap had narrowed to 845 units separating detached homes and condos.

It’s also worth noting that Toronto region condos were the only property type to post a monthly sales increase in December. Detached, semi-detached and townhouses all saw activity decline from November to December.
Housing Market Overcomes 2020's Obstacles for Third-Best Year on Record


After years of a booming Greater Toronto Area (GTA) housing market, 2020 marked the first real obstacle for the real estate business since the late 2000s recession. COVID-19 brought on unprecedented challenges that saw staggering declines in market activity starting in the second quarter of the year. Despite all of the hurdles encountered last year, a new report from the Toronto Regional Real Estate Board (TRREB) reveals that 2020 ended up being the third-best year on record for the GTA market, with a total of over 95,000 home sales and a new record average selling price of $930K.

“The Greater Toronto Area housing market followed an unfamiliar path in 2020. Following the steep COVID-induced drop-off in demand during the spring, home sales roared back to record levels throughout the summer and fall. A strong economic rebound in many sectors of the economy, ultra-low borrowing costs, and the enhanced use of technology for virtual open houses and showings, fuelled and sustained the housing market recovery,” reads a statement issued by Lisa Patel, TRREB President.

Even with the pandemic's hit to the economy, job losses, and other associated challenges, the 95,151 sales recorded last year actually marked an 8.4% increase over 2019's sales figures. After the initial wave of public health restrictions was rolled back, the housing market saw an unprecedented bounce-back that included multiple record-breaking months. Most recently, the month of December broke records with 7,180 sales marking a year-over-year increase of 64.5% While sales growth was pronounced overall, it was strongest in the 905 regions, most notably in the single-family home submarket.

“While the housing market as a whole recovered strongly in 2020, there was a dichotomy between the single-family market segments and the condominium apartment segment. The supply of single-family homes remained constrained resulting in strong competition between buyers and double-digit price increases. In contrast, growth in condo listings far-outstripped growth in sales. Increased choice for condo buyers ultimately led to more bargaining power and a year-over-year dip in average condo selling prices during the last few months of the year,” stated Jason Mercer, TRREB Chief Market Analyst.

2020 average home prices climbed to an all-time high of $929,699, a 13.5% jump over 2019. In December, the average was up to $932,222, marking an 11.2% year-over-year climb. As with sales, the average home price increase was most pronounced in the 905 single-family home submarket.

“The next 12 months will be critical as we chart our path through recovery. In particular, the impact of resumption in immigration and the re-opening of the economy will be key. TRREB will once again be releasing its January results, Market Year in Review and 2021 Outlook report on February 8th. This will include a forecast for home sales and selling prices, the latest Ipsos consumer polling on the GTA housing market and new research related to innovative ways to bring on more housing supply,” stated John DiMichele, TRREB CEO.

GTA luxury home sales surge as homebuyers search for more space during pandemic


With the COVID-19 pandemic forcing us to spend more time indoors, the desire for bigger homes among luxury buyers across the Greater Toronto Area has pushed sales in some expensive price categories to new highs.

GTA luxury home sales priced between $3 million and $4 million broke a record in 2020, according to new data published this week by RE/MAX Ontario-Atlantic Canada.

One thousand and sixty-two freehold and condo properties over the $3 million mark changed hands last year, about one percent higher than the previous all-time high achieved in 2017, when 1,047 homes in the same pricing category sold. Sales over $3 million in 2020 were also up over 55 percent from 2019, when 682 transactions were recorded.

Sales at even higher price points — the $4 million and $5 million categories — also rose from their 2019 totals, but did not exceed the highs achieved in 2017.

“A combination of both economic and psychological drivers contributed to a robust upswing in demand, influencing one of the greatest pivots in the GTA’s housing market history,” said Christopher Alexander, Chief Strategy Officer and Executive Vice President of RE/MAX of Ontario-Atlantic Canada, in the report.

While economic stimulus, like rock bottom mortgage rates, played a role in the market’s surge in homebuying activity, RE/MAX Ontario-Atlantic Canada explains that COVID-19 lockdowns were the true catalyst for the uptick.

The desire for home offices and more personal space were attributed as the driving forces behind luxury buyers seeking larger homes in 2020, often in less densely populated areas that sometimes fell outside of suburbs immediately surrounding the city. For instance, freehold sales over $3 million in Halton region increased by 188.8 percent annually, jumping from 45 to 130 sales.

“This same pattern played out in major urban centres in the US such as New York City and San Francisco where the pandemic has tipped the scales in favour of a more suburban lifestyle,” explained Alexander.

“And while demand is still strong in the 416, where luxury freehold sales represent 59 percent of total sales, performance in suburban areas, especially those north and west of the city, is particularly noteworthy,” he added.

Toronto investors still earning hefty ROIs
If you think activity in Toronto’s condo market has decelerated, think again.

“The information that’s not being reported, but that I see because I have to approve these and sign off on each one of them, is there are a lot of assignment sales right now,” said Sam Crignano, president of Cityzen Development Group. “This is information that isn’t reported on the MLS. The market is not as quiet as people think. It’s active, and I would say in a good way.”

Indeed, according to Toronto Regional Real Estate Board data for November, condo sales in the City of Toronto rose by 0.8% year-over-year. And while investors flip assignments all the time, being a landlord in today’s condo market, which has been infused with a glut of supply courtesy of a heavily regulated, and shrunken, short-term rental pool, has lost its lustre. That doesn’t mean the condo units aren’t still worth a lot of money, though.

“What we’ve seen recently, because the rental market is somewhat soft, is people are choosing to sell their assignments rather than hold onto them long-term,” said Crignano. “In buildings we’ve finished in the last six months where investors are selling assignments, they’re selling at a decent profit that’s still a discount to today’s market value. If they bought at $800 per sq ft a few years back, the market appreciated. New condos today are at $1,200-1,300 per sq ft, but a lot of investors are selling at a price that’s closer to $1,000 a sq ft. End users are taking advantage of lower prices and historically low-interest rates, which has created relatively cheap money.

“As much as people think the condo market is dead, it really isn’t.”

In fact, as Howard Cohen explains, end users are often unwilling to wait three to five years to occupy their new home, but investors rarely flinch when they put a 20% deposit down on a preconstruction unit. With Toronto condo prices declining by 3% year-over-year in November, end users are likely circling.

“If a condo costs $600,000, you need $120,000 cash deposit, and not a lot of people have that, but investors do and they’ll buy the unit,” said Cohen, president of Context Development. “Three years later when they decide to sell it, somebody can buy it using a 5% down payment with CMHC’s help. So the $600,000 unit might now be worth $800,000, but the buyer only needs $40,000 to buy it. Investors get a bad rap but they really do fuel the housing market for a lot of people.”

Assignment flips can net hefty returns, particularly for units on higher floors, but the developer must first sign off on them—which they aren’t likely to do if their building still has units for sale. Crignano says that isn’t usually a problem in Toronto.

“If I have a building completely sold out, they’re not competing with units I have for sale, and on that basis I’d grant permission for them to sell the assignment,” he said. “However, if I have plenty of units left for sale, I’d obviously want to sell my units first before I allow assignments, but the market has been so strong the last two years that most developers are sold out and grant assignment sales to purchasers.”
Mizrahi Developments

A partnership is about values, what you want to achieve and why. Simply put, Mizrahi Developments came about with a vision of several goals to change expectations in the industry.
Firstly, it was a desire to enhance the changing streetscapes of Toronto with carefully articulated, mid-to-high-rise buildings that give those who work and live in them as much pleasures as those who pass by their exteriors.

But just as important as what we build is the notion of how we build.

And by that we mean our values as professionals. It may be buildings we’re constructing, for residential, commerce and retail, but we’re aware that they have impact on people’s lives. They become a permanent part of physical identity with an influence on how people feel, live and experiences the city. It is with that understanding of our business as one that’s about far more than merely bricks and mortar that we have put an emphasis on relationships with customers, architects, designers, local residents, city counselors and suppliers as the foundation of our work. We believe that development of the physical landscape of a city can be a good thing, not something accepted out of resignation to change, but welcomed and celebrated for the delight and improvements it brings.

With our customers, our priority is to give peace of mind with the industry’s top certifications. But our commitment to service doesn’t stop when the building is completed. The uniformed, trained concierge, who works 24/7 in our residential buildings, as well as other staff, is under our employ to deliver the best and meet our customers’ needs. We leave nothing to changes. Similarly our relationships with suppliers result in loyalty and a commitment to build on time and one budget.


Rents will be strong in this Canadian metropolis in 2021


Canadian landlords have endured a difficult 2020, but there is one metropolis that, according to a Rentals.ca report, is brimming with investment opportunity.

“Montreal is expected to be the top major market in Canada next year with rent growth of 6%, rising from $1,665 per month forecast for December 2020 to $1,760 per month,” the report said. “There is clearly no urban exodus in Montreal despite the strong rent growth in 2019, and the above-inflation increase in 2020, average rents are still relatively affordable in comparison to Vancouver and Toronto.”

In the Montreal region, which Rentals.ca called “a bright spot for landlords in Canada,” rents rose by 9% year-over-year to $1,454 for one-bedrooms in November, although rents were down 1.4% from October. Two-bedroom units in the City of Montreal increased by 5.1% year-over-year to reach $1,889 last month, and also rose by 0.4% from October.

However, if 2020 has been any indication, landlords in the Greater Toronto Area aren’t likely to see rents increase in 2021, at least to start the year.

According to the report, the city’s rents declined for 12 straight months in November, as the infusion of supply into Toronto’s long-term rental pool and a scarcity of renters have softened the market.

A one-bedroom unit in the GTA averaged $1,877 last month, plunging by 19% year-over-year and 2.3% month-over-month, but it’s still the highest in Canada. A two-bedroom unit in the region averaged $2,468, falling by 17.2% from November 2019 and by 2.6% from October.

“The average property for rent in Toronto is now $520 cheaper per month in November of this year compared to November of last year,” said the report. “The average rent dropped by a whopping 20% annually to $2,081 per month, lower than Mississauga. On a per-square-foot basis, the average rent declined from $3.60 PSF to $3.12 PSF, a decline of 13%.”

Short-term rental regulations and a dearth of international students, most of whom fled Canada when the COVID-19 pandemic struck and catalyzed lockdowns, has resulted in a proliferation of condo units in the City of Toronto that has rendered condo rentals the weakest segment of the regional real estate market.

“We’ve monitored the market and, pre-COVID, we had 4,500 rental condos units available in Toronto, and in August the number grew to above 10,000 units,” said Alex Balikoev, senior vice president of sales at Sotheby’s International Realty Canada. “The reasons for that were job losses and a drop in immigration.”

The average rent in Canada, according to Rentals.ca listings, was $1,743 in November, which declined by 9.1% year-over-year and by 2.2% month-over-month.

The average rental price of a one-bedroom unit in Vancouver was $1,865 in November, falling by 5.2% from the same month in 2019, and by 1.9% from a month earlier, while a two-bedroom unit averaged $2,636 last month, which is a 13.8% year-over-year decline and a 2.8% month-over-month drop.

“In November of last year, the average rent in Vancouver for all property types on Rentals.ca increased by 7% annually to $2,507 per month,” said the report. “A year later, the average rent is down 12% year-over-year to $2,216 per month.”

Meet the foreign buyers who bolster Canada’s economy


The term “foreign buyer” is often used pejoratively in Canada—it’s become synonymous with speculators who have nary a vested interest in the country apart from using empty homes as appreciation vehicles, to the detriment of the domestic population—and it couldn’t be more misguided.

Turns out, many of these new Canadians bolster the national economy in ways few people can, and it is not without personal risks, either. Richard Leuce, an immigration consultant and owner of Richard's Business Immigration Corp., specializes in high-net-worth individuals from South Africa, most of whom yearn to replicate their success in a safer environment.

“South Africa is a beautiful, beautiful country—I fell in love with it the minute I landed there—but it’s not very safe, and a lot of times South Africans, who are ready to invest hundreds of thousands of dollars, are looking for safety,” Leuce told CREW. “My clients’ intents are to become Canadian citizens. Their first language is either English or Afrikaans, and if that’s the case then English is their second language. They seek to become permanent residents as soon as possible; they’re not just coming to buy properties and leave them vacant.”

Leuce primarily works through the Ontario Provincial Nominee Program (PNP), which requires his clients to create business plans, pass interviews with Canadian immigration officials, and take an exploratory trip to the region of the province where they want to set up shop. But Leuce says it isn’t as simple as it sounds.

“After all of the relevant information is submitted, the province scores the applicants and, if successful, follows up with a performance agreement, which stipulates that the nominee has up to two years to meet all requirements, including investing at least $600,000 and creating high-paying jobs,” he said. “They’re not hiring family members; they have to hire Canadian citizens. They invest money and boost the economy here. They did it in South Africa and they want to do the same thing in Canada. They’re active contributors to the economy.”

Among the many innovative ideas from abroad that Leuce has helped turn into Canadian companies is a plastic recycling firm that hopes to assist Canada achieve its zero plastic waste by 2030 goal. Not all ideas have to be bankrolled by the applicant.

“In a lot of developing economies, you have people with these great, innovative ideas, but who may not have the money,” said Leuce. “For these individuals, the Start-Up Visa program is an excellent avenue. The entrepreneur with the idea enters into a partnership with a Canadian angel investor or venture capital firm already in Canada to bring the idea to fruition using the latter’s money.”

The Canadian government announced in November that it would welcome 1.2 million new immigrants into the country through 2023, 60% of whom Immigration, Refugees and Citizenship Canada (IRCC) described as belonging to the “economic class,” which includes skilled workers, investors and entrepreneurs. But the second wave of the COVID-19 pandemic may prove a spanner in the works, warns Leuce, because processing times have already ballooned and the country’s ambitious goal to settle record numbers of immigrants in each of the next three years might not be attainable.

“The second wave will slow everything down. The door is not closed, but there will be a slowdown and it will take a while until the backlog is cleared. I’m curious to see if, in the spring budget, [IRCC] gets additional funding to hire more officers, or gets the money to pay existing officers overtime, because if the agency doesn’t get an increase in its budget, there’s no way things will move along. The spring budget will be the biggest indicator.”

Where are Canada's most taxed residential and commercial properties?


Yesterday, Altus Group released its seventeenth annual Canadian Property Tax Rate Benchmark Report, a study of the commercial and residential property tax rates in eleven of Canada’s major population centres. The report found that for the third year in a row, eight of the eleven cities studied have commercial tax rates that are at least double that applied to residential properties.

For 2020, the five cities with the highest estimated commercial property taxes per $1,000 of assessed property value are:

  • Montreal – $36.99 per $1,000
  • Quebec City – $35.03 per $1,000
  • Halifax – $34.41 per $1,000
  • Ottawa – $26.64 per $1,000
  • Winnipeg – $23.17 per $1,000

The cities with the three lowest commercial tax rates per $1,000 of assessment were Vancouver ($6.73), Saskatoon ($15.65), and Regina ($17.31).

Vancouver’s rate was the most dynamic compared to 2019, shrinking 27.9 percent year-over-year. According to Terry Bishop, Altus Group’s president of property tax in Canada, the change in the commercial tax rate in Vancouver reflects a key realization on the part of city managers.

“I think they probably knew that they were leaning a little too much on the commercial sector,” Bishop says. “With the economic fallout of COVID coming along, I think they saw an opportunity to provide some relief to businesses. They’re the only city across the country that did anything significant on the property tax abatement side.”

While not on the same scale as Vancouver, Calgary lowered its commercial tax rate by 11.9 percent in 2020. But in Cow Town’s case, the decrease was more the result of the desperate situation faced by many of the city’s businesses, who had been asked to pay higher property taxes in each of the previous three years.

“It was getting to the point where businesses couldn’t afford the taxes that they were paying,” Bishop says. “The city had to bite the bullet and increase residential rates and reduce commercial rates.”

Of the other four markets that saw their commercial tax rates fall, only two, Toronto and Winnipeg, experienced declines of greater than four percent. The biggest year-over-year rise in commercial rate occurred in Saskatoon, where it grew a modest 2.6 percent.

Residential tax rates were largely unchanged, with the national average of residential property taxes per $1,000 of assessment for 2020 coming in at $8.98, a penny less than a year before.

The highest residential property taxes this year can be found in Halifax, where they are $11.96 per $1,000 of assessment, Winnipeg ($11.94), and Ottawa ($10.85). They are lowest in Vancouver ($2.92), Toronto ($5.99) and Calgary ($7.52).

As with commercial properties, Vancouver and Calgary also saw significant movement in their residential rates. Vancouver’s increased 14.2 percent year-over-year, while Calgary’s rose by 13 percent.

The ratio
Taking the commercial and residential data one step further, Altus Group calculated a commercial-residential tax ratio for each city. Bishop says the ratios may be the most important data point the study has to offer, as they speak to the disproportionate share of the property tax burden commercial owners are asked to carry.

“I think it’s more important to watch the trend in the ratios from a fairness and equity point of view than the actual tax rate,” he says.

Because property taxes account for a large portion of the rent paid by most businesses, and because they represent one of the most onerous operating costs for business owners that own their own properties, Altus Group fears that small businesses required to pay an outsized proportion of a community’s property taxes will face serious competitive challenges. If they can’t survive in their current marketplace, they may be enticed to move to a new location where the tax burden is significantly lower.

“It’s important that municipalities are aware of that and don’t lean on them too hard,” Bishop says.

This year, the highest ratios were found in Montreal (4.1), Toronto (3.6), and Quebec City (3.5). The cities with the lowest ratios were Saskatoon (1.7), Regina (1.7), and Winnipeg (1.9).

For the first time, Altus Group also studied the separate impacts municipal and provincial governments play in determining each market’s commercial-residential ratio. In Calgary, Edmonton, Montreal, Quebec City and Halifax, it was found that the higher-than-average ratios are being driven by municipal taxes, while the high ratios in Toronto and Ottawa are largely the result of provincial education levies.

Bishop admits that reducing property taxes is a tough sell for provinces and municipalities scrambling to make up the tax revenue lost as a result of COVID-19-triggered business closures. But asking businesses to keep paying their current tax rates when so many are on the verge of collapse isn’t the rosiest of alternatives.

“To expect to recover the same amount of taxes from those businesses when their revenues are down significantly,” he says, “is a tall order.”

Urbanation releases Q3-2020 market update — new condo sales reach record high


The right time to buy things is usually when other’s aren’t, which is why I’ve felt that this year was a great time to buy a centrally located condo. Cities aren’t going anywhere. This isn’t their first pandemic. Downtown demand will return as soon as urban life returns and the majority of people are back in their offices next year.

I’ve also been predicting that the run-up in single-family home prices that we have seen this past year here in Toronto will eventually lead to a surge in demand for condos (and perhaps even for larger suites). It’s a question of relative affordability. And so it was interesting to see Shaun Hildebrand of Urbanation predicting the same thing for 2021 in this recent Toronto Star article.

Hildebrand thinks the soaring prices of single-family homes will also push more buyers back to the condo market.

As of November, the average price gap between condos and detached houses was $596,000. The gap between a condo and a semi-detached or townhome was about $217,000. Both of those were at their second-highest levels since the market peaked in late 2016-early 2017, he said.

“This could really start to swing demand towards condos in the second half of the year,” said Hildebrand.

Realosophy data shows condo sales were already up year over year prior to the holidays —

23 per cent the first week of December,

31 per cent the second week and

72 per cent the week of Dec. 14.

That means 727 condos sold that week, compared to 418 in the same week last year.

Urbanation just released its Q3-2020 market update for the Greater Toronto Area and the data is very encouraging for the new condo market. Here are some of the highlights:

  • There were 6,730 new condominium unit sales in Q3. This represents a 30% year-over-year increase.
  • More of this growth happened in the suburbs (905) with 3,834 units sales vs. 2,536 unit sales in the City of Toronto (416).
  • Of the 6,694 units that launched for sale in Q3, about 3/4 of them sold. This is the highest absorption rate since Q4-2017.
  • The average selling price for a new condo launched in Q3 was $1,044 psf (GTA average). This is up 3.5% compared to last year.
  • New launches in the suburbs sold for an average of $915 psf. New launches in the City of Toronto sold for an average of $1,275 psf.

I reckon that many of the people purchasing right now are looking through and to the other side of this current macro environment. They recognize that things will get better and that the Toronto region will continue to thrive. That’s certainly how I’m thinking about it.

Thinking exponentially and the rule of 72

in finance - investing, we need to think *exponentially*, not *linearly*.

Money compounds. Growth doesn't happen at a constant pace; it *accelerates* over time.

Most of us are not programmed to intuitively "get" compounding — over the long run.

It’s about the importance of thinking exponentially, as opposed to linearly, when it comes to finance and investing.

In it, the author provides a quick rule of thumb to help reframe our mind when it comes to compounding. It’s called the “rule of 72” and it works like this.

To calculate the approximate number of years to double your money, simply take 72 and divide it by the annualized rate of return (%).

For example, if you had an annualized rate of return of 10%, this rule of thumb would tell you that you’re going to need 7.2 years to double your money.

If the annualized rate of return were to increase to 18%, it would now only take you 4 years to double your money. Of course, this rule of thumb is an approximation. It only really works within a certain band of returns.

If the annualized rate of return were 100%, this formula would spit out 0.72 years, whereas an annualized rate of return of 100% actually means that you’re doubling your money in the span of one year.

It’s a rule of thumb. The reality is that compound returns are incredibly powerful over the long-run, not only for finance and investing, but for life in general. Worthwhile things take time. If you’ve got the patience and discipline, the long-run curve ends up looking pretty sweet.

5 Housing Market Trends to Watch for In Canada in 2021


It goes without saying that 2020 was an unprecedented year, and that the ripple effect on the housing market was swift and notable. Across the country, home buyers, sellers, and renters re-evaluated their housing priorities as they navigated the COVID-19 pandemic, and many local housing markets saw several months of record-breaking sales following a spring of record-breaking declines.

As we look forward to 2021, here are 5 housing market trends that everyone has their eye on going into the new year.

1. 18-Hour Cities Across Canada Will Continue to Drive Housing Demand
A common mantra you hear in real estate is: location is everything. One of the major implications of the pandemic was that it pushed home buyers to reconsider the scope of how location factored into their home purchase.

With remote-working options becoming commonplace across the country – and some companies making them permanent – a growing group of home buyers in dense, major cities like Toronto began prioritizing square footage and green space, where they may have previously put a premium on workplace proximity.

Not only did this result in skyrocketing demand for single-family homes in general, it also spurred many buyers to expand the boundaries of their home search far beyond city-limits. Many looked to 18-hour cities, often defined as “mid-size cities with attractive amenities, higher-than-average population growth, and a lower cost of living and cost of doing business than the biggest urban areas” to find better value.

For example, in Ottawa, home prices rose 19% year-over-year in November, and competition remained fierce among prospective buyers. “With huge buying demand being fueled by out-of-town buyers transitioning to the Ottawa market, we can expect prices to be driven up in the new year,” said Jonathan Amodeo, Broker in Ottawa.

Generally speaking, with increased flexibility to live and work anywhere, we can expect home buyers to continue to look further for affordable, spacious, single-family housing, which in turn is expected to drive demand within these cities and consequently put upward pressure on home prices as has been the trend in 2020.

2. ‘Typical’ Seasonal Real Estate Cycles Will Return And Buyers WIll Face Strong Competition
As most of the country came to a stand-still in March following stay-at-home orders, the economic and healthcare repercussions of the pandemic also brought the spring housing market to a halt; with record-breaking declines in prices and sales.

In response, the real estate sector as a whole pivoted to a virtual-first model, and as conditions improved, real estate boards and associations across the country implemented stringent safety protocols to prioritize the safety of the community at-large. As healthcare conditions eased over the summertime, pent-up demand, and limited inventory resulted in what many described as a “delayed spring market” effect, which in turn led to the record breaking sales experienced throughout the rest of the year.

Based on today’s expectations of an approved COVID-19 vaccine being rolled out in the coming weeks and months, plus an entire real estate industry that now has experience safely working within the framework of COVID-19 as we know it, buyers and sellers can expect for more traditional real estate cycles to reemerge in 2021 – with the market being at its busiest in the spring and the fall.

In fact, a recent report found that housing competition strongly favoured sellers in every single one of 25 major Canadian housing markets; with some of the most competitive conditions existing outside of Canada’s largest housing markets of Toronto and Vancouver – in Canada’s mid-sized cities. We can expect this trend to continue, as more Canadians who are seeking out more square footage and green space are willing to look further for housing.

3. Condo-Dense Markets Could See An Uptick in Rental Demand
Widespread closures across workplaces, universities, and the Canadian border to tourism and immigration alike resulted in rental vacancies rising to 2.8% in condo-dense markets like Toronto this past October (from just 0.7% the year prior), and at the highest levels for the first time in over a decade. Low demand spurred an increase in new listings and a consequent drop in rental prices, particularly across the city centre, and in areas popular for short-term rentals.

If the border opens up, and life begins to trend closer to what it was like pre-pandemic as a result of the vaccine, we can expect demand for rentals to grow again in city centres, particularly in the latter half of the year. For now, “if a renter is looking to get into a beautiful, trendy downtown condo at a prime location, now is a great time to lock it in,” said Andrew Kim, an agent in Toronto.

4. Mortgage Rates Will Remain Affordable
In response to the pandemic, the Bank of Canada kept the overnight lending rate at it’s “effective lower bound” of 0.25% for much of the year, with plans to maintain this rate until “economic slack” from the pandemic is absorbed, which is likely to be until at least 2023. Mortgage rates in turn, remain at an all-time low, with fixed mortgage rates hovering near the 1% mark.

Based on the Bank’s guidance, we can expect the overnight lending rate to remain steady for much of 2021 as the economy reacts to short term spikes in COVID-19 cases, and recovers over the long term as the vaccine is rolled out.

As far as mortgage rates go, there is potential for a slight increase in fixed rates as the bond market recovers in response to vaccine news and rollout. This in turn could impact the rate at which real estate prices rise toward the latter half of the year.

5. The Housing Market in the Prairies Could Get A Boost
The Prairies have been hard-hit by the coupling effect of the pandemic plus the ongoing impact of fluctuations in the energy market on jobs and consumer debt and spending. That being said, housing competition remains fierce in the region, with all major areas in the region experiencing strong seller’s market conditions this fall, e.g. Winnipeg (SNLR of 88%), Saskatoon (SNLR of 82%), Calgary (SNLR of 87%) and Edmonton (SNLR of 76%). Generally speaking, when the SNLR or sales-to-new-listings ratio is over 60%, competition conditions favour sellers over buyers because demand outpaces available supply.

With average home prices under the $500,000 mark across the Prairie region’s largest cities, if the world starts turning again and the economy and immigration into the region begins to recover in response to the vaccine, we can expect that the housing market in the Prairies may start to bounce back later in the year.

Average Ontario Home Prices Could Rise More Than 16% in 2021


Last week, the Canadian Real Estate Association (CREA) released its latest resale housing market forecast, which revealed that — despite turbulent spring months — homebuyers are on track to set a record for activity in 2020, with some 544,413 homes projected to change hands by December 31, an 11.1% increase from 2019 levels.

Subsequently, the national average price in 2020 is on track to rise by 13.1% on an annual basis to just over $568,000 — reflecting the current balance of supply and demand, which heavily favours sellers in many local markets.

In Ontario, CREA forecasts that 228,665 homes will change hands by the end of the year, up 9.2% from 2019 levels,. While the average price should rise 17% to $708,377, up from $604,883 in 2019.

CREA’s forecast noted that mortgage interest rates have declined to record lows in 2020, including the Bank of Canada’s benchmark five-year rate, which is used by major banks to qualify applicants under the federal mortgage stress test, which has lead to more buyers being able to qualify for mortgages this year.

With the Bank of Canada committing to keep interest rates low into 2023 and with mortgage interest rates expected to remain near current levels through the new year, CREA forecasts 2021 will still be a strong year for sales.

“On a monthly basis, sales are forecast to ease back to more typical levels throughout 2021,” CREA wrote in the report. However, presuming there’s a more normal spring market in 2021, the year as a whole is expected to see more home sales than 2020.”

On a national level, CREA is predicting 584,000 home sales for 2021, up 7.25% year-over-year. All provinces except Ontario are forecast to see increased sales activity in 2021, as low-interest rates and improving economic fundamentals allow people to get into the markets where homes are available for sale.

For 2021, CREA has predicted that there will be 221,220 home transactions in Ontario, a decline of 3.3% from 2020 levels. However, average home prices are expected to climb 16.3% to land at $823,656.

“Ontario has seen strong demand for several years, particularly outside of Toronto, which has eroded active supply in the province,” CREA said in its report.

“The strength of demand, particularly for larger single-family properties, will drive the average price higher as potential buyers compete for the most desirable properties.”


This forecast comes as Ontario’s housing market was down on a year-over-year basis in November, however, this reflected a supply issue rather than a demand issue — particularly in the ground-home segment. This has led to the average home price in the province remaining up year-over-year.

The largest year-over-year gains in November — between 25- 30% — were recorded in Quinte & District, Tillsonburg District, Woodstock-Ingersoll and a number of Ontario cottage country areas.

Year-over-year price increases in the 20-25% range were seen in Barrie, Bancroft and Area, Brantford, Huron Perth, London & St. Thomas, North Bay, Simcoe & District, Southern Georgian Bay, and Ottawa. This was followed by year-over-year price gains in the range of 15-20% in Hamilton, Niagara, Guelph, Cambridge, Grey-Bruce Owen Sound, Kitchener-Waterloo, Northumberland Hills, and Peterborough and the Kawarthas.

Moreover, prices were up in the 10-15% range compared to last November in Oakville-Milton and Mississauga. Across the GTA, the average selling price for all home types was up by 13.3% to $955,615.

With just ten days left in 2020, CREA is far from alone with its predictions around average home prices increasing in the new year. James Laird, co-founder of Ratehub.ca, expects detached home prices will increase between 4 to 7% in 2021, with the strongest growth in the suburbs around major urban centres.

“With Canadians working from home, the demand will continue to be strong for more space. Larger homes outside of the city centre will see the strongest demand,” said Laird.

What’s more, Royal LePage, predicts that the median price of a standard two-storey home in the GTA will rise 7.5% next year, reaching an average price point of $1,185,800. In a significantly less dramatic increase, the median price of a condominium is forecast to increase 0.5% to $600,800.

Meanwhile, the aggregate price of a GTA home (all home types) is expected to increase by 5.75% year-over-year, ultimately reaching $990,300.

Looking ahead, only time will tell how the housing market will truly perform, but for now, let’s hope 2021 holds as much good news as suggested by the forecasted increase in home prices in the region.

Major condo price correction is unlikely despite collapsing demand: BMO


While there’s no doubt that downtown condos were left in the dust when suburban single-family home sales and prices took off during Canada’s economic recovery, the chances that urban high-rises will see a significant price drop over the next year is unlikely.

In his response to November housing market data published this month by the Canadian Real Estate Association, BMO Senior Economist Robert Kavcic acknowledged that urban markets “are highly out of favour right now” with homebuyers.

But even as the price gap between condos and single-detached homes is likely to widen in the new year, condo markets in major cities, including Toronto, Montreal and Vancouver, should eventually find their footing, Kavcic wrote in a research note published last week.

“Will we see a deep correction? Probably not. The ‘death of the city’ thesis is probably excessive,” he wrote.

That said, the economist believes there will be some condo “overhang” — in other words, excess supply — to work through before the hard hit downtown markets in Canada’s largest cities can regain their strength. Strong rent price appreciation and a robust short-term rental market that fed investor enthusiasm for urban condo in these cities is also unlikely to return any time soon, despite the positive developments on the vaccine front.

After a barn-burning year for rural and vacation property demand, Kavcic sees these markets remaining “extremely tight” into early 2021, meaning price growth will continue for the time being.

What remains to be seen is how demand will change 2021’s second half on the realistic assumption that vaccine distribution will permit many aspects of city life to resume. Kavcic said that activity may plateau in those farther flung markets that have seen their appeal rise during the pandemic.

Price declines are also in the cards later in the year and into 2022, though the economist believes these markets will retain some of the pandemic-driven boost in property values.

Quarterly Forecasts

December 15, 2020 – The national average price is forecast to rise by 9.1% in 2021 to $620,400. Average price trends across Canada in 2021 are generally expected to resemble those in 2020. Shortages of supply, particularly in Ontario and Quebec, are expected to result in strong price growth, while Alberta and Saskatchewan are anticipated to see average prices pick up following several years of depreciation.

Ottawa, ON December 15, 2020 – The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate boards and associations.

Current trends and the outlook for housing market fundamentals suggest activity will remain relatively healthy through 2021, with prices either continuing to climb or remaining steady in all regions.

Economic activity continues to improve slowly following the initial stages of the pandemic. Over the past several years, record levels of international immigration, low interest rates and an increasing share of millennials entering their home buying years have helped make the housing market a significant source of strength for the Canadian economy. The recent government support programs for individuals and businesses have also helped the overall economy through the most severe parts of the pandemic to date.

Mortgage interest rates have declined to record lows in 2020, including the Bank of Canada’s benchmark five-year rate used by Canada’s largest banks to qualify applicants under the B-20 mortgage stress test. With the Bank of Canada committing to keep interest rates low into 2023, mortgage interest rates are expected to remain near current levels through 2021.

Recent national sales trends have improved more than anticipated over the second half of 2020. New listings in most of the country have also recovered. However, while sales activity rebounded to record-high levels, new listings only recovered to about their five-year average in most markets. The relative strength of demand for homes compared with supply has meant sales activity has been eroding active inventory, which was already scarce in many markets pre-pandemic. That said, this has been a trend since 2015.

The increase in demand has impacted every part of the country, including the Prairies and Newfoundland and Labrador. While these regions aren’t experiencing the same intensity of upward price pressures as the rest of the country, compared with previous years, demand is strengthening and prices have indeed started to increase.

Despite the historic setback to the spring market caused by the pandemic, CREA projects national sales to hit a record of 544,413 units in 2020, representing an 11.1% increase from 2019 levels. The strength of the Canadian housing market was broad-based, with every province except Alberta registering a year-over-year increase in sales. British Columbia and Quebec stand out as large contributors to the overall gain.

The national average price in 2020 is on track to rise by 13.1% on an annual basis to just over $568,000. This reflects the current balance of supply and demand, which heavily favours sellers in many local markets.

On a monthly basis, sales are forecast to ease back to more typical levels throughout 2021; however, presuming there’s a more normal spring market in 2021, the year as a whole is expected to see more home sales than 2020. National home sales are forecast to rise by 7.2% to around 584,000 units next year. All provinces except Ontario are forecast to see increased sales activity in 2021, as low interest rates and improving economic fundamentals allow people to get into the markets where homes are available for sale.

Ontario has seen strong demand for several years, particularly outside of Toronto, which has eroded active supply in the province. This shortage is expected to limit sales activity in 2021. The strength of demand, particularly for larger single-family properties, will drive the average price higher as potential buyers compete for the most desirable properties.




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