Homebuyers in the Greater Toronto Area better prepare to spend more than they ever have before.
The Toronto Regional Real Estate Board said Monday that the average selling price for homes in the area will top $1 million for the first time later this year.
The board predicts by the time 2021 ends the average selling price in the region will be $1.025 million, up from an average $929,692 in 2020.
“We’ve reverted back to the scenario that really we’ve been talking about a lot over the past number of years, where the supply of listings coming onto the market is not keeping up with growth in transactions,” said Jason Mercer, TRREB’s chief market analyst, at a press conference.
“Taking those demand factors into account, plus what we’re looking at for new listings coming into the market, that spells continued tightness.”
Mercer’s remarks come as the area rang in the new year with an unprecedented flurry of home purchases that pushed the number of sales up by 52% and the average selling price to nearly $1 million.
The spikes were fuelled by an atypical December, where people were discouraged from gathering for the holidays in an effort to quell Covid-19 and the region wasn’t often being blanketed with snow.
That left people with fewer social engagements and more time to hunt for new properties.
TRREB said January home sales reached 6,928, up from the 4,546 homes sold in the same month last year.
The average selling price was up by 15.5% to $967,885, an increase from $838,087 in 2020.
The number of new listings also climbed to 9,430, a 20% spike from last year’s 7,848.
Homehunters in the region won’t find much reprieve as the year progresses, TRREB chief executive John DiMichele warned.
“I’m not convinced at all that we’re going to have a blip no matter how cold it is. People just seem to be out there,” he said. “It’s going to be a steady climb.”
The board predicts sales will total 105,000 in 2021 and new listings will hit 160,000, up from 95,115 and 156,755 respectively last year.
TRREB president Lisa Patel said those spikes will be fuelled in part by the rollout of Covid-19 vaccines, declining cases of the virus in hot spots and very low mortgage rates.
“Once we shift out of this lockdown, those that are comfortable will have the opportunity to put their homes on the market,” she said.
“That might open up supply a little bit more.”
The board believes new condominium apartment listings will slow towards the second half of the year and low-rise listings will remain constrained.
Market conditions for low-rise homes, including detached houses, will remain very tight, with sales rising at a faster pace than listings, TRREB warned.