November, 2020 Market Review
The torrid pace of real estate transactions in this latter half of 2020 continued through November. TRREB reported 8,766 sales in November across the GTA, up 24.3% over November, 2019. New listings also increased, by 33.4% (from 8,651 in November 2019 to 11,545 in November 2020), and active listings available at the end of the month increased, from 11,958 last November to 13,798 this November, a jump of 15.4%. What’s interesting about that is not just that we saw those increases, but that they happened in November, when the market is usually starting to trail off for the year (as we head into the holiday season). I think that this is a reflection of the momentum that the market has had since the end of the first ‘lockdown’. Basically, it’s about the pent-up demand.
That demand is reflected in the significant increase in the average sale price, up 13.3% year-over-year, to $955,615. TRREB’s HPI, which weights the average across the various housing types (i.e. detached, semi-detached, condos, etc.), was up by a slightly more modest 10.6%, but that’s still a strong increase.
Condo availability was once again nearly double what it was last year. Sales in the 416 were up marginally (just 0.8%), with the logical result that the average selling price dipped, by 3% year-over-year. By contrast, sales in the 905 were up strongly, by 23.3%, and the average sale price went up by 4.8%. I think that this suggests that the state of the Toronto condo market is due to the effects of COVID-19 on the downtown segment, and is not necessarily a sign of decline in the broader market. My best guess is that it will be temporary, meaning now is not a terrible time to buy, but rather may rather be an opportunity. As TRREB put it in their November Market Watch report: “Once we move into the post-COVID period, we will start to see a resumption of population growth, both from immigration and a return of non-permanent residents. This will lead to an increase in demand for condominium apartments in the ownership and rental markets”. Gee… where have y’all heard *that* before? 😉
Mortgage rates continue to hover around record lows. This is good for new buyers, for up-sizers and for investors (see above: condos). So, I’d expect December to continue with the trend, and be busier than usual. Logically, January, 2021 should continue the trend, but for now, I’m taking a wait-and-see approach to that….