Changing housing needs triggered by the pandemic and low interest rates have kept the housing market in Canada boiling, says Royal Bank of Canada senior economist Robert Hogue.
The search for more living space continues to take buyers to the suburbs and beyond, he adds.
The overall picture in the Greater Toronto Area remained surprisingly bright even as the city of Toronto and nearby Peel Region fell under tighter physical-distancing restrictions again.
Still, there are complexities within the data, Mr. Hogue points out. He calls the core 416 area code “both hot and lukewarm”: Sales of single-family homes rose in November while condos remained flat compared with the same month last year.
The Beaches neighbourhood on the edge of Lake Ontario illustrates trends in the overall market because of its wide range of housing types: from luxurious waterfront mansions to smaller, semi-detached houses and newly built condos.
Rochelle DeClute, broker at Union Realty Brokerage Inc. in the Beaches expects some of the recent momentum will carry into 2021 as Canadians continue to make spending on real estate a priority.
The traditional slowdown over the holiday season may be less noticeable this year, says Ms. DeClute, who specializes in east-end neighbourhoods.
Ms. DeClute says trading in all segments has remained brisk.
“We’ve had a very busy year.”
As of Nov. 30, 751 properties had sold in the east-end area the Toronto Regional Real Estate Board labels E01. That compares with 624 that changed hands in the same period last year.
The end of the month saw more properties on the market than one would typically find at this time of year. There were 84 active listings in E01 in 2020 on the last day of the month, compared with 45 in 2019.
Ms. DeClute says one reason for the additional supply is that the completion of a few condo projects added units to the market when construction wrapped up.
Just as the new supply was coming on, empty nesters who had been planning to move into a condo began putting their plans on hold until the pandemic is in the past.
“The condo market has really slowed down,” Ms. DeClute says of the confluence of trends.
As for detached homes, there were 25 active listings in the area on the final day of November, compared with 16 on the same date in 2019.
As for the final weeks of 2020, new listings are still arriving, says Ms. DeClute, who adds that December is not typically a month when agents favour listing detached houses with backyards and gardens. But this year is exceptional in many ways.
Some of the sellers are planning to move out of Toronto, she says, pointing to homeowners with second properties in such Ontario destinations as Collingwood and Prince Edward County.
Several clients had planned to retire in those locations eventually, but the pandemic has accelerated their plans.
Before the health crisis, the DeClute team would have a conversation with clients thinking about leaving the city a couple of times a year.
“Now we’re having that conversation a couple of times a month.”
The trend is a marked change from the past because one of the most appealing aspects to many residents of the Beaches neighbourhood is the small-town feeling that Queen Street East provides. Buyers were willing to pay a premium to live there so they could stroll to bakeries, boutiques and cafés.
Now most people are spending more time at home.
In some cases, they’ve decided on a complete change in lifestyle.
“Walking to shops and restaurants isn’t as important,” she says.
Another shift has come as homeowners consider renovating, then change course when they investigate how costly and time-consuming a project is going to be. Contractors are busy, she says, and the price of building materials has climbed.
Many decide to list the house instead. Moving also allows them to acquire more space – which has become the greatest luxury of all when two parents are working at home or children are learning online instead of in the classroom.
In some cases, homeowners who would typically leave town over the school holidays or head south for the winter are staying put this year. Since they’re here anyway, they figure they might as well get on with moving, Ms. DeClute says.
For all of those reasons, sellers are listing now instead of waiting for the traditional spring market, which typically begins ramping up in February.
“We’re seeing people not wanting to wait,” she says.
And sellers who list now will draw plenty of attention.
“There are a lot of buyers out looking now.”
While Ms. DeClute doesn’t expect a slowdown in the market in 2021, she does hear from some clients who want to complete their buying and selling now because they feel uncertain about the strength of the economy down the road.
Some are worried that the second lockdown will inevitably bring mounting job losses and financial hardship for struggling commercial landlords. They also point to the high levels of government financial support and wonder what that will mean for fiscal policy in the years to come.
“Some people are saying, ‘I’m doing nothing until this is over.’ There are others who want to move on with their lives.”
Ms. DeClute expects the new year to remain busy.
“I think we’re going to be going gangbusters.”
Looking back to March, when the first restrictions on travel and business were imposed, Ms. DeClute says she never would have imagined the year would unfold as it has. She recalls bracing for the possibility that land registry offices in Ontario might be forced to close. Her firm had lawyers write clauses into sales agreements so that buyers and sellers would be protected from legal wrangling in the event that happened.
As it happened, the provincial government kept the wheels turning for deals already in motion. The market took a deep dive but went on to set records for sales and prices.
“We just had no idea where it was going to go,” she says of the housing market in 2020. “It’s certainly turned out a lot better than we thought it would.”
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