Skip to main content
Welcome to
super saver spring
offer ends april 20
save over $140
save over 85%
$0.99
per week for 24 weeks
Welcome to
super saver spring
$0.99
per week
for 24 weeks
// //

Homes near Yonge Street and Eglinton Avenue in Toronto on Dec. 9, 2020.

Fred Lum/The Globe and Mail

The average home price in the Toronto region will soar to more than $1-million this year, the area’s real estate board says in its annual forecast, as record-low mortgage rates push aside pandemic concerns to fuel another frenzied period of buying.

The Toronto Regional Real Estate Board predicts 105,000 homes will sell this year, a 10-per-cent increase over last year, when buyers benefited from low borrowing costs and raced to buy properties with more room in the city, suburbs and semi-rural areas.

Sustained demand for houses, combined with dwindling supplies of low-rise properties, will keep competition hot. The average selling price is expected to reach $1,025,000 across the Greater Toronto Area and nearby regions. That is a 10-per-cent increase over last year’s average selling price of $932,222.

Story continues below advertisement

“Just looking at the momentum we had, and the fact that we expect to see borrowing costs remain low, it makes sense that demand for housing generally will remain strong as we move through this year,” the real estate board’s chief market analyst Jason Mercer said on a call with reporters.

Mr. Mercer said the conditions are similar to prepandemic days when the mismatch between supply and demand spurred heady competition. But he said the market was not as tight as in 2016, when record sales and skyrocketing home prices prompted policy-makers to impose stricter mortgage rules and anti-speculation taxes.

Today, the record-low mortgage rates have made it easier for borrowers to get bigger loans. Since the pandemic began and rolling lockdowns restricted activity and forced people to work from home, buyers have sought properties with more room to accommodate their home offices and with outdoor spaces.

“More buyers are acting quickly,” said Sean Simpson, a vice-president of market-research firm Ipsos, on a call to discuss the outlook. Ipsos surveyed buyer intentions in November and December and found that the level of interest was similar to that of previous years, with the strongest intentions in Toronto and just west of the city in Peel Region.

Mr. Simpson said there was a clear trend into the suburbs and that more people were likely to buy a detached house.

The push toward areas just outside the city is reflected in steep price increases. The average selling price of a detached house in the suburbs was up 36.6 per cent, to $1,308,393, in January over the same month last year. In the city, meanwhile, the average selling price of a detached house was up 16 per cent, to $1,581,400.

Part of the suburban price increase can be attributed to buyers from Toronto. “People are used to Toronto prices,” said Paul Taylor, the president of mortgage lobby group Mortgage Professionals Canada, on the same call.

Story continues below advertisement

Condos in downtown Toronto continued to be the only type of property to lose value. Although resales almost doubled, the average selling price was down 8 per cent in January, to $624,886, year over year. Apartment and condo rental vacancies have increased in downtown Toronto but if the economy reopens and immigration picks up, the real estate board expects that trend to reverse.

Overall, the average selling price of homes rose 15.5 per cent, to $967,885 in the twelve months to January. The home price index, which adjusts for expensive purchases, was 11.9-per-cent higher over the same period. Home resales were 50-per-cent higher than the same month last year.

With travel on hold, the real estate board said the highest demand has been domestic.

The province’s COVID-19 cases have been declining over the past few weeks but the more contagious variant from the U.K. is expected to be the dominant strain and cases could start climbing again. Mr. Simpson said that home buying continued to be strong during the fall and winter when cases had started to spike and he said he did not expect that demand to subside if there was a third wave.

The pandemic has disproportionately affected poorer households and low-paid industries like retail, food services and accommodation. Meanwhile, wealthier households and homeowners have gotten a break with the low interest rates and were able to save more when entertainment and travel virtually disappeared.

Mr. Simpson said more people have been able to buy homes sooner rather than waiting because they have extra money in their pockets.

Story continues below advertisement

Although banks provided mortgage deferrals for almost 17 per cent of their residential portfolios, most of those deferrals have expired and homeowners have resumed loan payments.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies