A year in real estate review: Toronto's biggest trends of 2020
After viewing 65 homes in six months and putting down nine offers, Brandi Ricci and her husband finally landed their dream home in Hamilton.
They never expected to be dealing with multiple bidding wars during a pandemic, but Ontario's real estate sector has remained strong even as other areas of the economy experienced a downturn since March.
This past November, the Toronto Real Estate Board found that homes sales were up 24.3 per cent in the Greater Toronto Area compared to the same time last year. Toronto sales were also up, but not the same amount. The reason, people have been rushing into the suburbs looking for single-family homes.
"The first house we bid on, we were outbid by $200,000," said Ricci. "Just like everyone else, we're both working from home and now everyone wants land and larger homes."
Ditching the city, moving to Durham Region
Less popular areas that were once considered affordable experienced some of the biggest booms, says John Pasalis, president of Realosophy Realty Inc. He's been tracking pandemic trends and says home prices in Durham Region went up 23.9 per cent between November 2019 and November 2020. A single-family home now costs about $150,000 more than it did last year.
"The hottest region in the GTA is Durham right now," said Pasalis.
"It became unbelievably popular, if you want a detached home, if you want a yard, all of those things, Durham was kind of the only region where it was somewhat affordable. York Region is expensive, Mississauga is expensive. So people just rushed to Durham because it was somewhat affordable."
That influx of eager buyers looking for a deal is what's made Durham a competitive market.
'Everyone wants a home office and big kitchen'
Low borrowing rates, says real estate agent Andrew Ipekian, are pushing people's dollars further. That means more families are shopping for larger homes with extra bells and whistles, things they may not have considered before because they weren't practical or out of their price range.
"People are turning into home bodies. They want a pool, they want home offices, they want a big kitchen because they're cooking more," said Ipekian.
"Those low interest rates means they now have the money to get those extra luxuries."
Those who don't want to move or can't afford to do so, are considering other options like upgrading their current home or adding an extension. The Municipal Property Assessment Corporation (MPAC), an organization that assesses and classifies the value of all properties in Ontario found that this year more people were renovating their homes.
Renovations up across Ontario
"With people spending more time at home... we saw a 28% increase in the number of renovation permits this year as people invested in making improvements to their homes," said Nicole McNeill, MPAC's president and chief administrative officer.
Toronto's once-soaring condo market is the sector that has seen a decrease in sales and prices. Experts point to several reasons for this decline: everything from a pause on immigration to post-secondary students staying home rather than moving into the city and into a condo rental.
There's also a need for more space now that condo dwellers are working from home. Many are abandoning their units and heading outside the city, so there are more units up for sale now than there were in the last few years.
But construction of skyscrapers has continued.
"In 2020, Ontario saw more than 36,000 new residential units and 16,000 residential condominium units [built]," said McNeill.
Condo sales could start to rebound
As the COVID-19 vaccine is rolled out and more people head back to the office, experts believe the condo market will rebound. In fact, it may already be happening.
"We're starting to see demand from investors jump into the market right now and that could slow down that downward trend we're seeing right now," said Pasalis.
Ipekian agrees, saying what he's seeing is a Boxing Day-like sale of condos in downtown Toronto where first-time home buyers or investors could get in on a really good deal.
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