December 2020 Market Review
December 2020 Review
The month of December continued in alignment with prior months posting increased activity in terms of number of transactions. The results for the GTA as reported by the Toronto Regional Real Estate Board (TRREB) showed a 64.5% increase in number of sold properties relative to December 2019 .
The greatest increases in sales activity continued to be in the surrounding areas of the GTA for the single family detached houses. On an annual basis year over year the 905 area showed an increase of 18.3% in sold units while the 416 area had a 4.4% increase in annual year over year transactions. The month of December 2020 outpaced that of December 2019 in sold units across all segments in both the 905 and 416 areas as illustrated below broken down by product segment. On TRREB the total new listings for the month of December 2020 were higher by 66.1% over December 2019 and the total active listings for the same period were up by 6.6%.
Increasing Sale Prices
On TRREB the average sale price for all home types for the month of December 2020 was higher by 11.2% when compared to December 2019. When looking at the average price by home type, the detached houses showed the highest increase of 17.7%, followed by semi-detached at 16.6% increase, followed by townhouse at 14.1% increase and finally with the condo apartment segment producing a decrease in average sale price of 2.0%.
What trends are we seeing?
The trends outlined in our last Newsletter are continuing into 2021:
1. The condominium apartment market continues to be the “opportunity market” for buyers as inventory continues to exceed demand. It should be noted however that buyers continue take advantage of the low cost of borrowing and as there is a greater awareness of an “opportunity market” for buyers and investors in the condo segment we are seeing increased activities at the start of 2021 so it may be that the “opportunity market” is short lived.
2. The demand for single family houses market especially for the mainstream price categories remains strong and thus continuing to create a very competitive environment for buyers. This coupled with the low cost of borrowing is contributing to these market conditions continuing into 2021.
What lies ahead for 2021?
All factors of the market continue to point to a strong real estate market regardless of the new COVID-19 restrictions. Over the Holiday’s and at the commencement of the New Year we have seen multiple offers occurring across the GTA. Both interest rates and inventory (except for the condominium market) remain low. As much as the condominium market is currently saturated with inventory (for both for sale and lease units) and thus prices are dropping slightly, it is expected that this market segment will pick very quickly once we are over the worst of the COVID-19 travel restrictions are lifted giving way to more sustainable investment options in the condominium market. With respect to the upper end real estate market the successful sales of 2020 would have been based on domestic demand, as both immigration and return on non-permanent residents to Canada occur during 2021, we expect strong demand in the upper end real estate market.
Footnote: Source of statistical data is from the December 2020 Market Watch report of the Toronto Region Real Estate Board (TRREB) MLS.
Monthly Percentage Change in Number of Units Sold – December 2020 – Illustration A
Month-Over-Month Average Price Percentage Change – December 2020 – Illustration B
Seasonally Adjusted Month-Over-Month Average Price Percentage Change – December 2020 – Illustration C
Monthly Percentage Change in Average Sale Price – December 2020 – Illustration D