TRREB expects high housing demand for this year

The forecasts for the GTA housing market are quite strong, as buying intentions are expected to be strong, sales may exceed 100,000, and an average home price may reach a record level of over $1 million.

The Toronto Regional Real Estate Board (TRREB) has released its Market Year in Review & Outlook 2021 Report and a digital digest including TRREB’s annual market forecast, the latest Ipsos consumer survey results, the recent Altus statistics, rental market tendencies, research on innovative ways to improve housing supply and mortgage market trends.

“The pandemic has definitely brought to an unprecedented year for a housing sector, but it hasn’t reduced the overall demand,” – says Jason Mercer, TRREB Chief Market Analyst. “In 2021, we believe a strengthening economy and renewed GTA population growth following massive vaccinations will drive the demand for ownership and rental housing. However, the housing supply will still be a problem later, particularly in a low-rise sector.”

Market forecasts for 2021

• Home sales made through TRREB’s MLS® System for the GTA, South Simcoe County and Orangeville may reach 105,000.
• Great sales growth will be pushed up by the on-going economic recovery, including employment growth and record or almost record low level of borrowing costs.
• The speed of new condo listings will begin to slow down, especially in the second half of 2021. As low-rise listings will be still constrained, a total new listings are expected to reach 160,000.
• Market conditions in the segment of low-rise houses will be still tight, as sales are expected to go up faster than listings.
• The overall average price for all home types and areas will exceed $1,000,000 for the first time and reach $1,025,000, thus showing a 10% annual gain.
• Although mortgage deferrals were a point of concern when the pandemic started, Mortgage Professionals Canada don’t predict a significant increase in mortgage delinquencies. Most homeowners who used mortgage deferral programs did it only because of caution and not because they faced financial problems, so they have returned to their usual payments.

Market statistics for January 2021

• Real estate sales reached 6,928, representing a more than 50% increase from a year ago. Such a beginning of the year included sales growth in all major segments, both in the City of Toronto and surrounding GTA regions.
• New listings also showed an annual gain, although not as large as sales. As a result, we saw another month of double-digit growth in the MLS® Home Price Index and the average home price.
• The average home price rose by 15.5% from January 2020 to $967,885. The MLS® HPI Composite Benchmark went up by 11.9% annually.
• Prices increase was pushed up by the low-rise market sectors, while the average condo price fell in Toronto. Nevertheless, in case condo sales growth keeps exceeding condo listings growth, we may see growth rebound in condo prices later in 2021.