FROM RECORD LOW TO RECORD HIGH – THE GTA REAL ESTATE MARKET IN 2020, AND WHAT 2021 MAY BRING Posted onJanuary 21, 2021March 18, 2021 Paria Rad This past year brought many changes as Canadians learned to navigate the expected and unexpected effects of a global pandemic. We look back at 2020’s GTA real estate market and share some insight into a year that was anything but predictable. Following the lockdowns in early spring and despite a nearly 70% plunge in the Toronto real estate market in April of 2020, numbers managed to climb to a record high in the course of the second half of the year. By June, the market began to make up for the slow spring market, with the end of 2020 boasting sales that exceeded 2019 numbers by 8.4%, and the average selling price for all home types combined was up by 13.3% to $955.615. Reasons Most predictions concerning the Toronto real estate market of 2020 were mistaken. In April, the vast majority of real estate and investment experts anticipated a decline in both property sales and prices. It seemed likely that a drop in pricing and sales would stem from the stagnant demand for housing caused by historic job losses, collapsing equity markets, and stalled immigration. However, low-interest rates and higher savings enabled many first-home buyers to seize the opportunity to enter the market when they had previously not been able to. According to Statistics Canada, while Canadians saved 2-3 percent of their disposable income before the pandemic, that percentage increased to 28.2 percent in the second quarter of 2020. Furthermore, Canadians that generally fall into the home-buying category were least likely to suffer from job losses. Additionally, the market’s rapid recovery and success is partially due to the shared longing for more living space, which led to immense competition for certain property types. Staying at home, working from home, working out at home, and home-schooling put significant strain on those in small living spaces, driving many occupants to look for larger alternatives, often outside of the downtown area. At the same time, condominium units declined in popularity, with this sector of the Toronto real estate market falling by 6.7%. What 2021 May Bring With the COVID-19 vaccine becoming widely distributed and with historically low-interest rates that are likely here to stay, 2021 looks as though it will be a strong year for the Toronto real estate market. Potential home-buyers will again be comfortable to attend viewings and sellers will allow people into their homes for open houses that have often been conducted virtually in the second half of 2020. Moreover, the government is targeting high immigration numbers for 2021 and expects the return of both international students and non-permanent residents, which will bolster the housing demand in the post-pandemic GTA. If you require assistance with your real estate purchase or sale or refinance, please feel free to contact Paria Rad at 905-668-4486 or paria@durhamlawyer.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” Authors Paria Rad 905-668-4486 (905) 668-9737 paria@durhamlawyer.ca