After taking a summer breather, it’s full steam ahead for the fall and winter real estate market in the Greater Toronto Area (GTA), according to people in the industry.
The market report by Toronto Regional Real Estate Board (TRREB) for August reported the third-best sales result on record for that month. However, the supply of listings was down, while competition among buyers ramped up, meaning double-digit annual increases in selling prices.
“The housing supply shortage and resulting affordability crisis has been the big headline, particularly in the low-rise property segment” says Christopher Alexander, senior vice-president of Re/Max Canada. “We’re starting to see some easing in the market, but with no major supply boom expected in the near future and immigration returning, competition between buyers and rising prices may intensify in the months ahead.”
TRREB reported 8,596 sales through the MLS® system in August, down by 19.9 per cent compared with August 2020 (a record 10,738). However, the average selling price for all homes combined was up by 12.6 per cent year-over-year, to $1,070,911.
“There has been no relief on the supply side for homebuyers, in fact, competition between these buyers has increased,” says TRREB chief market analyst Jason Mercer in the report. “As we move toward 2022, expect market conditions to become tighter as population growth in the GTA starts to trend back to pre-COVID levels.”
There were 10,609 new listings in August, down 43 per cent year-over-year (18,599).
Alexander says he doesn’t expect the same level of market frenzy we saw last spring, but fall will be a good indicator of what’s to come in early 2022. Ideal sellers’ market conditions will likely continue, barring any major shifts in housing supply.
Low interest rates, which Alexander expects to rise at some point in 2022, is another market driver. “If rates increase more than 1.5 per cent, we can expect to see a market shift.”
Single-family detached homes will continue to drive the market, he says.
The condo market continues to counter that overall sales trend. That segment took a deep dive during the pandemic, but it’s now on a steady, upward trajectory. As immigration resumes and downtown businesses continue to reopen for business and lifestyle, rising condo sales, average prices and rental rates are expected to continue unabated.
Mimi Ng, senior vice-president of residential sales and marketing for Menkes Developments Ltd., points to the re-emergence of the downtown condo market as one of the big storylines as well.
“With rising vaccination rates, major employers talking about returning to the office, and schools announcing the resumption of in-person classes, the market attitude towards new condominium development is much more positive,” she says.
A number of developers have new projects in downtown neighbourhoods this fall. Menkes is launching a new project called The Whitfield, a 38-storey building with approximately 470 units, located at Front and Sherbourne streets, in the historic Old Town neighbourhood.
Ng points to the downtown lifestyle as a sales focus for The Whitfield, which is located in a highly walkable community with great shopping, restaurants and close access to the waterfront and St. Lawrence Market.
“The other interesting aspect of The Whitfield is that the larger Downtown East context surrounding this site is really thriving and seeing a lot of growth, with several new office buildings already completed or in the process of being built, and major tech companies (most notably Google) set to move in,” she adds.
Jordan Morassutti, co-founder and partner at North Drive, also points to lifestyle as one of the reasons for robust condo sales for their three projects – 10 Prince Arthur, 36 Birch, and One Forest Hill, boutique buildings on tree-lined streets.
North Drive specializes in up-market end user condominiums for people who are searching for more intimate luxury condo properties with plenty of outdoor space and don’t want to be in a 50-storey tower.
“I think this is going to be the strongest fall market we have seen in quite some time,” he says. “I think there’s a tremendous amount of pent-up demand. When unique offerings come to market they trade at really strong price points.”
His buyers focus more on, “rightsizing rather than downsizing,” he says.
People are telling him they would rather not be in a three-storey building with five bedrooms. North Drive offers the same living area over a single level that for the most part mimics what exists in their single-family home, but with fewer bedrooms, plenty of outdoor space, whether it’s terraces or backyard space, and larger areas to live, work and entertain.
Cailey Heaps, president, chief executive officer and broker of record for Heaps Estrin in Toronto, says condos are ideal for first-time buyers looking to get a foothold in the real estate market as affordability continues to be a concern.
She saw a slowdown in the overall market over the summer, but is seeing high demand from buyers looking for properties with features and benefits that suit their new lifestyles, such as swimming pools, outdoor spaces, home offices and gyms.
“There will be buyers who want to acquire something before prices escalate further,” she says.
Another market story, according to Ng, is the continued growth of the 905 condo market, which she says continues to represent the majority of condo sales in the GTA through the first six months of 2021.
“We have observed this trend first-hand. In fall last year, we launched two 50- and 55-storey towers with 1,325 units in the Vaughan Metropolitan Centre, called Festival Towers, which sold out in less than four months,” she says.
In the Central Counties Region, which encompasses all of Durham Region, York Region, Dufferin County, Caledon and Caledon and Erin, there are several factors contributing to rural community generation, on top of the tourism and lifestyle appeal of the region, which boasts trails, conservation areas, provincial parks and vibrant smaller towns.
Chuck Thibeault, executive director, industry development, Central Counties Tourism, says price point is a huge factor for people moving to his area.
A three-bedroom detached home with two-plus bathrooms listed in Toronto for $1.8-million would sell for: $725,000 in Bowmanville, with a comparable lot size; $989,000 in Georgina, with twice the lot size; and $830,000 in Grand Valley with a comparable lot size, according to MLS® listings, Thibeault says.
“All three examples are much newer and don’t need near as much work as the one in Toronto,” he says. “Province-wide prolonged shutdowns have aided in growth of sales. Corporations realized that staff productivity did not suffer when people worked from home, and staff realized they liked not having to commute.”
Because the region is still in proximity to downtown Toronto people can still travel for sporting events or the theatre, for example, so it combines the best of both worlds.
“The one thing I noticed last week when I was out in Scugog and then Alton was the number of new developments going in,” Thibeault says. “I think this is a trend right across the ‘small communities’ within Central Counties. Developers wouldn’t be building if there wasn’t the demand.”
Out in Halton, Ont., Sarah Logue, broker of record for Re/Max Escarpment Team Logue Realty Inc., says, from talking to clients and colleagues, that the fall market is going to climb and spike again.
“There were so many buyers who missed out on the insanity [of last spring],” she says. “They lost in a competition or lost because of exhaustion. The desperation is there. Buyers are panicking, and there doesn’t seem to be a cooling effect.
“Last night I was working on an offer way outside my normal area, with 14 other agents trying to find properties, outbidding a price by $300,000 in an area that had no business being bid up like that.”
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