Despite a global pandemic having left millions without work, closed international borders, and halted much of the global economy, the Greater Toronto Area (GTA) housing market continues to show resiliency, with 95% of the real estate districts showing solid gains in average price, according to a new report from RE/MAX of Ontario-Atlantic Canada.
The report also revealed that active listings across the GTA real estate markets hovered at 14,000 in June, the lowest level for the month since 2016 when active listings bottomed-out at 12,327.
What’s more, the average price was up in 95% of areas between January and June 2020, compared to the same period in 2019 and double-digit increases were reported in 60% of districts within the 416 area code and in 50% of 905 districts.
“Strong demand characterized much of the first quarter of 2020, setting the stage for a record-breaking spring market in the Greater Toronto Area – and then came Covid-19,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada.
“In past downturns, a drop in unit sales has usually been followed by a significant upswing in the number of homes listed for sale. That didn’t happen in this case as buyers and sellers paused in April, then cautiously resumed home-buying activity as COVID-19 cases dropped and local economies re-opened. With the easing of restrictions and the province moving into the third, and perhaps final phase, we anticipate that the housing market will likely accelerate.”
Of the 65 Greater Toronto real estate districts examined in the report, RE/MAX found that the strongest gains in average price occurred in areas in close proximity to Toronto’s central core.
According to the report, Yonge-St. Clair, Annex, Casa Loma and Wychwood, saw the largest percentage gains, with values climbing 25.7% to $2,918,968. Move-up buyers were particularly active in this area, with a shortage of homes listed for sale, particularly in the Annex. In June, there were 28 active listings, average days on market were 17, and the sale-to-list price ratio was 98%.
Alexander says he believes the spring market that materialized in June will remain robust throughout the summer months as pent-up demand, low-interest rates, and limited inventory headline market drivers.
“Virtually every housing category in the GTA, from starter homes to the luxury market, will be impacted by pent-up demand in the months ahead,” explains Alexander. “Historically low-interest rates – with five-year closed rates as low as two percent – will also provide impetus for the foreseeable future.”
While sales of detached homes were down overall, RE/MAX found several suburban/rural districts that still managed to show signs of growth. Most were located in more suburban and rural areas of the GTA, where RE/MAX says “the dollar stretched farther and listings were plentiful.”
Leading in terms of percentage increase in detached housing sales was the King area in York Region, where 161 detached properties changed hands, up from 117 one year earlier, representing a 37.6% upswing in volume. Just under 200 active listings were available for sale in June, average days on the market hovered at 44, while the sales-to-list price ratio was 93%.
“While the strength of the market is underscored by rebounding economic fundamentals, it’s clear that we are not out of the woods yet, given what’s happening around the world,” explains Alexander.
“Having said that, the manner in which government has handled COVID-19 has been exemplary, and while there may have been some missteps along the way, we have all benefitted from leadership at all three levels. I’m confident that under their continued guidance and direction, we will be able to navigate any and all stormy waters ahead, and that bodes well for the economy and the housing market overall.”