Those looking to buy a single-family home in the Greater Toronto Area can expect competition in the spring months, as pent-up demand and inventory levels could lead to price appreciation, according to a new report from Royal LePage.
On Friday, Royal LePage released its House Price Survey and Market Forecast, which revealed that more than half of Canada’s largest real estate markets saw double-digit price growth as national home values soared 9.7% to $708,842 in the fourth quarter.
The latest data also revealed that the significant year-over-year increase in aggregate price was driven by price gains for larger properties, with 64% of all regions included showing year-over-year median price gains of more than 10% for two-storey homes.
When broken down by housing type, the median price of a standard two-storey home rose 11.2% year-over-year to $840,628, while the median price of a bungalow increased 10.0% to $592,899. Additionally, the median price of a condominium increased 3.9% year-over-year to $509,239.
On a provincial level, Ontario posted the highest year-over-year aggregate home price gains in dollar value during the fourth quarter. During this period, Royal LePage says the aggregate price of a home in Markham increased $133,932 to $1,100,436, the highest dollar value increase in aggregate home price.
Markham was followed by Vaughan, which increased by $132,699 to $1,130,483; Burlington, which increased by $115,475 to $950,796; Pickering, which increased by $110,905 to $856,725; and, Oakville, which increased by $109,912 to $1,215,405.
Phil Soper, president and CEO of Royal LePage, says the surge in sales that characterized the second half of the year is a sign that Canadians feel confident buying and selling properties during the pandemic.
Yet, while many homeowners are purchasing homes in the suburbs outside of large cities, the demand for properties in urban centres still remains high.
On a local level, the aggregate price of a home in the GTA increased 10.4% year-over-year to $936,510 in the fourth quarter of 2020. Broken out by housing type, the median price of a standard two-storey home increased 11.9% year-over-year to $1,102,155, while the median price of a bungalow rose 12.8% year-over-year to $923,047.
During the same period, condominiums in the region continued to see healthy price growth, with the median price rising 3.6% year-over-year to $593,811.
With the exception of condos, similar strong home price gains were seen in the City of Toronto where the aggregate price of a home rose 7.4% year-over-year to $960,368 in the fourth quarter.
When looking at housing types, the median price of a standard two-storey home in Canada’s largest city increased 10.6% year-over-year to $1,446,184, while the median price of a bungalow rose 12.3% year-over-year to $1,001,083. During the same period, the median price of a condominium grew 1.4% year-over-year to $634,081.
“Throughout the second half of 2020, buyers were looking for as much space as they could afford. While many buyers shifted their target neighbourhood away from the city centre, so few properties for sale meant that most detached listings saw multiple-offer scenarios,” said Debra Harris, vice president, Royal LePage Real Estate Services Ltd.
Harris added that 2020 did bring some balance to the region’s condominium market, but larger units, often in the greater region, are still in high competition.
Harris says that pent-up demand in the GTA remains significant for detached homes and inventory levels will be a leading indicator of price appreciation in the spring market.
“The GTA real estate market could absorb a short-term influx of detached home listings and remain in a seller’s market. If inventory remains low, prices can only go up,” said Harris.
The latest findings come on the heels of Royal LePage releasing a forecast that the median price of a standard two-storey home in the GTA is expected to rise 7.5% next year, reaching an average price point of $1,185,800. In a significantly less dramatic increase, the median price of a condominium is forecast to increase just 0.5% to $600,800.
Meanwhile, the aggregate price of a GTA home (all home types) is expected to increase by 5.75% year-over-year, ultimately reaching $990,300.