Most of us have had it up to here when it comes to COVID-19. We’re burned out, frustrated and ready to move on. However, there are some things about the pandemic we just can’t ignore. Here we look at how the pandemic has changed our city, and the lasting impact it will have on the Toronto real estate market.
Saying No Thanks to Living in Close Quarters
The highly spreadable nature of the virus had people rethinking the idea of stacked living. The downtown condo community took quick note of their living arrangements and said no thanks to living in close quarters. Suddenly the call of the 905 suburbs was turned up full blast with people envisioning private driveways, no elevators and lobbies, not to mention staycation-worthy backyards.
Perhaps even more importantly, small living spaces weren’t great for people working from home (WFH). Add to this, school shutdowns and it all became too much to bear. WFH also meant no dreaded commute, so hey, why not move out to the ‘burbs? As a result, sales in detached homes declined in 416, while they started to rise in 905. Listings for condos increased, as did the price for homes in the once more affordable suburbs. Those prices are still in place today, adding equity to suburbanites’ pockets.
Condo or detached home? Are you looking to level up your space? Read some of our condo resources here to find out if you’re ready for a change:
- How to Be Sure it’s Time to Trade Your Condo for the Suburbs
- Guide to Pre-Construction Condos
- Check Out Our Condo and Loft Listings Here
Canceling Short-term Rentals
Short-term landlords were quickly schooled on the benefits of long-term tenants when their entire industry all but disappeared. They had to make a choice: Sell or find a long-term tenant. This had several effects on the Toronto condo market:
- Condo inventories rose drastically between the mass exodus to the suburbs and the increase in short-term landlords needing to sell
- Condo rents declined due to more inventory available, putting tenants in the driver’s seat
- Condo prices dropped, but home buyers were in pandemic shock and not willing to venture out to tour these affordable homes
- Investors perked up their ears once they caught on and started snatching up condos, creating a 75% rise in condo sales — the market recovered
Today, condo sales remain healthy. They’re not seeing as much of a decrease in sales year over year compared to detached, semis and townhouses, and also are second only to semi-detached homes when it comes to price increases.
What Home Buyers Want Post Lock Down
Sheltering in place changed the way we view our homes. As a result, it impacted what home buyers want and therefore what sellers need. Some shifts in priorities include:
Now that the home office is commonplace, it has shifted from buyers’ wants checklists to their needs. Sellers need to consider a creative use of limited space to stage functional workspaces now that offices rule supreme.
Staycation-Friendly Outdoor Spaces
Limits on travel in hand with the number of people allowed to gather indoors, created more demand for outdoor living spaces. Sellers need to up their game to create idyllic “backyard resorts” to attract home buyers looking for their own slice of heaven.
Heading Due North, East and West
While the pandemic might have started a trend for Toronto homebuyers fleeing congested areas, current prices might not keep this trend alive. Areas such as Durham saw property values rise, which means Torontonians who failed to see the value of suburban homes missed the boat when it comes to affordability. Now, we’re talking areas more like London, Barrie, Kingston, and even Thunder Bay if you want to get more bang for your loonie. Suburban sellers need to price their homes wisely.
Thinking about selling your Toronto home soon? We’re all about making upgrades before you sell, but there are some that just simply aren’t worth it. Read more here.
Pandemic Markets in Review
Despite a glitch in the early days of the global pandemic, the disruption to Toronto’s real estate market didn’t last long. Here’s what the numbers looked like for 2020 and 2021:
- Over 95,151 home sales for the year, which was actually the third-best result on record
- Strong year-over-year sales growth in the GTA regions surrounding the city
- Growth in condo listings were higher than sales growth
- A year over year decrease in average condo selling prices of 2%
- A record-high average selling price for homes of $929,699 for the year
How we survived: Home sales were boosted thanks to an economic rebound, crazy-low interest rates and the magic of virtual open houses.
- 121,712 home sales for 2021 exceeding 2016’s record by 7.7%
- Home sales increased by 28% year over year
- Average selling price of $1,095,475, up 7.4% year over year
- The second strongest number of sales ever reported for the first month of the year
- City of Toronto sales returned to their desirable glory increasing by 36.8% compared to the suburbs at 23.6%
- A return to Toronto condo living with an increase of 52.2% year over year and almost twice as many sales in the city compared to the suburbs
How we survived: Increased interest in homes in the GTA bolstered by a return to the city, low inventory, job creation, economic growth, and the still exceptionally low interest rates.
When is the right time to buy or sell in Toronto? The truth is that the best time is actually whenever you are ready! Check out some of our buying and selling services here to see how we can help you get started:
- The Selling Process
- The Buying Process
- Featured Properties For Sale
- Sign Up for Personalized Listings
The Act of Selling or Buying Real Estate Looks a Little Different Too
Back in the day, it would be common to see Open House signs lining the streets on a weekend, or booking an appointment to go see multiple homes in person with your Toronto real estate agent. But during the pandemic, the act of doing things in-person became pretty much non-existent. Virtual tours, Zoom meetings, and sight-unseen offers became common.
As restrictions lifted, some agents rejoiced at the fact they could once again host an open house, while others decided not to bother with them anymore.
For buyers too, touring homes became a lot easier. With virtual tours and 3D floorplans, you could pretty much see every angle of the home before going to see it in person. This meant that buyers could refine their search even more before setting foot in a property. For busy buyers with little time to attend showings, this tech is indispensable, giving them back a lot of time that househunting once occupied.
Despite all the ways the pandemic changed us, Toronto is bouncing back. Right now, we’re watching the effect rising interest rates have on buyer mindsets and whether it will help create a more balanced market.
If you’re wondering if it’s time to leverage potential negotiating power in the shifting market the Christine Cowern Team’s got you covered. Give us a call at 416.291.7372 or email us at firstname.lastname@example.org. We’d love to work with you!