Photo by Johannes Plenio
The Toronto real estate market saw a continuation of the upward trend built off the confusing market of 2017. Having bounced back to similar numbers (albeit via a summer dip) since 2016’s outrageous market highs, it’s looking like Toronto’s in for another crazy run in 2020 due to continued pressure from immigration and a lack of supply overall.
Coming Full Semi-Circle
Despite average price gains across the board for all property types in Toronto, 2019 was the year that semi-detached properties saw some serious increases. Coming as close as 16% from the average for detached homes, semi-detached properties have been the holy grail for families and others trying to notch their way from condos to freehold property. We expect this trend to continue in 2020.
Condo-minimum
Condos in 2019 were no different than semi-detached properties. With a whopping 10.3% increase year over year in December, condominiums prices were driven by lack of supply as well as demand for the most affordable property on the market; a laughable stat for some no doubt as the average reached over $650K in many of 2019’s months. That being said, we may be reaching a saturation point in the average condo price. As many of the GTA’s new condominium builds are finally beginning to take occupancy, many analysts feel the ceiling on condo pricing has been reached. We’re undecided on that result as much of the supply being introduced is small and not suitable for young families; one of the key drivers in condo sales in the city.
Feeling Hot, Hot, Hot
Surprisingly, the areas of the city that have seen the greatest increase have been outlying areas in the city’s East and West-ends. This is likely due to their long-held undervaluation as investors and city-dwellers alike tried to attain prime Toronto real estate over the last few years. In some cases, neighbourhoods like West Hill and Centennial, Scarborough Village annd Guildwood, Malvern and Rouge and Willowridge, Martingrove and Richview saw increases of over 100% in the average sale price according to this Zoocasa report , proving that buyers are having to go further afield to get their piece of Toronto land.
2020 Predictions
Expect more of the same upward trends for 2020 across all property types. We’re not convinced that condos have hit their ceiling just yet and anecdotally, more and more clients and friends have decided to stay put and renovation or expand their existing homes in leu of higher interest rates, land transfer taxes and a limited supply of homes to choose from. Couple that with increased immigration pressure and investment in new developments and we have a perfect storm for a bull market going forward.
Of course there are outward pressures and variables like U.S. presidential races, the new Iranian conflict and the China/U.S. trade negotiations that could throw the entire world economy into chaos or potentially recession but barring a major war or negotiations going completely south, we feel this is the direction Toronto’s housing market is heading.
If you’d like to share your own viewpoint on the situation, we’d love to here from you! Leave a comment, send an email or give us a call. We love discussing market dynamics and the factors at play. All the best for 2020!
