There are plenty of factors that affect the housing market in Toronto such as customer trust, interest rates, unemployment, mortgage availability, or growth in the economy. But arguably the greatest factor as of this writing is the coronavirus pandemic.
In this article, we’ll go over the state of the Toronto housing market news, and how things are looking heading into the rest of 2020 and then in 2021.
The coronavirus disease, also known as COVID-19, is a virus that started out at the end of 2019 but gained worldwide notice when 7000 cases of the virus were reported in the month of January 2020 in China. The situation became even dire when over 80,000 cases were reported in the month of February 2020. Of those overall cases, about 3,000 had died. To make matters worse, the virus seems to have found its way all across the globe from the Middle East and Europe to the United States and there doesn’t seem to be any signs of it slowing down either.
On March 4th, 2020, the Mortgage Sandbox reported that the Coronavirus pandemic could raise home price volatility with a downside bias. And because travel to places like Iran and China, where the virus has been reported, has been called off temporarily, foreign buyers from the GTA housing market will be shut out. Due to this, lower interest rates will increase how much buyers are able to borrow as well as spend on houses.
Because the outbreak is continuing to spread, and more countermeasures are being taken by the Canadian government, sellers with open houses will become more uncomfortable, thereby inviting a mess of strangers to touring their houses. Open house buyers are also staying away from engaging in any type of contact.
If this issue persists, it will result in an economic slowdown in Canada which could very well lead them to sell homes forcibly, foreclosures and job losses.
The State Of Metro Toronto Home Prices
Even before the occurrence of the Coronavirus, prices had already risen more significantly than incomes in the last year all throughout 2019 and were barely responding to the events unfolding in a conventional seasonal real estate cycle. Those who had planned to sell their houses will find the courage to wait another year to get a high rate of return. But the house prices are still less than when the peak touched in May 2017.
We’ll go over the recent price trends for houses, condos, townhouses in the GTA (Greater Toronto Area) and look at the forecast followed by input from various top Canadian forecasters.
Metro Area Detached House Prices
There has been a modest incline in most submarkets. However, Oakville prices had depreciated a bit at the closing of 2019.
The benchmark house prices for Metro Toronto rose almost to $1 million in 2019. The municipal, provincial, and federal governments had incorporated steps to cool down the Toronto property market to bring a “soft landing” well not exactly specifying the type of soft landing that they were looking for. It is possible that they desire growth in prices in the range of 1% to 3% yearly so it matches with income growth.
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House Price Metro Toronto Chart
Despite Metro Toronto’s benchmark house prices rising, not every area is seeing a price gain. Some submarkets have experienced a surge in house prices whereas others have experienced a decline.
Median house prices are still increasing.
Metro Toronto House Purchase Via Price Range
Condo Apartment Prices
A modest increase in apartment prices has been witnessed in many submarkets with Mississauga and Pickering doing the best up until the closing of 2019.
Although not quite as dramatically as it did in 2017, apartment prices for Metro Toronto had shot up in 2019. These days, the benchmark condo in Metro Toronto is just as affordable without the aid from the Bank of Canada. When put into context, a benchmark apartment in Toronto is still more expensive than a single Calgary detached house.
Price Of Metro Toronto Condo Apartments
Although homes are being sold off very quickly, many are interested in mid-range apartments. The prices for apartments are definitely seeing an upward shift. Now it’s tough to find an apartment that’s below $400,000.
Prices For Metro Toronto Townhouses
90% of condominium townhouses that were purchased in 2018, had less than $800,000 in value and 61% of those townhouses had less than $600,000 worth of value.
First-Time Home Buyers Are Still Finding It Tough
Despite the prices for Toronto houses becoming more expensive, it’s still not as bad as Metro Vancouver where a house’s benchmark price is $1.4 million.
A first-time buyer who earns $78,000 is able to get a mortgage of $320,000. In order for a first-time buyer to buy a benchmark-rated condo, they’ll need to save about $250,000 of down payment cash or get a very generous present from their parents.