June 2021 Market Review
June 2021 Review
Many news outlets have drawn attention to the fact that the number of transactions on the Toronto Regional Real Estate Board (TRREB) decreased from May 2021 to June 2021 by 7.07%. This may be a function of buyer exacerbation, caution given the prior aggressive price increases in the market and the introduction of the more arduous stress test. We believe it is also notable to review, the changes in transactions between June 2020 and June 2021, with a reminder that June 2020 was also noted to be a very strong market.
Looking into the different geographic pockets of Toronto and the Greater Toronto Area (GTA) we notice the following changes in transactions when comparing June 2021 to June 2020. In the Toronto area: 21.9% increase in transactions for detached properties; 61.7% increase in transactions for semi-detached properties; 17.4% increase in transactions for townhouses; and 48.6% increase in transactions for condominiums. In the GTA: 15.9% increase in transactions for detached properties; 19.8% increase in transactions for semi-detached properties; 28.5% increase in transactions for townhouses; and 78.4% increase in transactions for condominiums.
Increasing Sale Prices
On TRREB, average sale prices when comparing June 2021 to June 2020, the average sale price for Toronto and GTA combined increased by 37% for detached properties, 22% for semi-detached properties, 17.8% for townhouses, and 8.3% for condominiums.
What trends are we seeing?
June 2021 marked the first month of the implementation for the new federal stress test where the new minimum qualifying rate for mortgages is 2% above the contract rate or 5.25%, whichever is higher. While the stress test may have posed a slight change in buyers’ borrowing power, we are seeing a decrease of product and sale prices in detached, semi-detached, and townhouse segments and an increase of product and sale prices in condominiums when comparing May 2021 to June 2021.
What lies ahead for 2021?
We are now watching closely the buyer patters focusing on the source of the buyer. With global social restrictions easing thus allowing prospective buyers from abroad to visit and potentially purchase properties; we will be assessing if this comes to fruition and the impact for sellers and buyers, respectively.
Footnote: Source of statistical data is from the June 2021 Market Watch report of the Toronto Region Real Estate Board (TRREB) MLS.
Monthly Percentage Change in Number of Units Sold –June 2021 – Illustration A
Month-Over-Month Average Price Percentage Change – June 2021 – Illustration B
Seasonally Adjusted Month-Over-Month Average Price Percentage Change – June 2021 – Illustration C
Monthly Percentage Change in Average Sale Price – June 2021 – Illustration D