September, 2020 Market Review
September was a busy month in the Toronto real estate market. What stood out the most was the number of sales – 11,083, up 42.3% over the 7,791 sales reported in September, 2019. To give some perspective, here’s what we saw in the last few Septembers:
2018 – 6,455 sales;
2017 – 6,334 sales;
2016 – 9,902 sales;
2015 – 8,147 sales;
So, it looks to me like the last couple of years were on the low side but, either way, this year saw a big increase for September – and I think we all know why: COVID! The market was so deeply disrupted in the first half of the year, that loads of demand got pent up, and is now being released (so to speak). Of course, there’s no predicting the future, but I think the message is that there are lots of buyers in Toronto.
The next biggest number is the average sale price, which surged 14%, to $960,772 (over $842,421 last September). Of note, the MLS® Home Price Index Composite Benchmark, which weights the averages by type of property, was up by a somewhat more moderate 11.6% – but that’s still a pretty impressive number. Again, a good sign regarding the health of the market.
I don’t normally mention the Days on Market (i.e. the average number of days it takes to sell a house), but that dropped from 23 to 16; that’s the quickest time to sell (in September) since 2016, and is another indicator of a busy market.
Condos, which I believe are the most vulnerable segment in the 416, still managed a sales volume increase of 14.6%, and an average sale price increase of 7.7%. With real estate markets shifting all across Southern Ontario, and with the work-from-home thing really taking off, it looks like more people are taking advantage of the opportunity to get out of the (shut down) city and make for quieter areas. (I’ve personally done a couple of sales like that so far this year….) Condos are a very common ‘starter home’, so I figured that they would show the most sales (they are), and I also wondered if we’d see a price correction (which we haven’t… yet). If the AirBnB’ers have to cut bait and run, we may yet see that correction, but so far, the pace of sales is keeping up with the increased supply.
Related, the Toronto rental market is in a correction. TRREB reported earlier this year that condo rental rates were down 5-6%, due to increased supply and apparently fewer renters (due to COVID). If lots of AirBnB’ers have to put their condos on the long-term rental market, that will have a further impact on rents. This could be a big help with the ‘affordability crisis’ that we hear about from the media from time to time. 😉 But, we’ll have to wait and see….