Two years ago, news of COVID-19 was just spreading around the world. Little did we know that the virus would soon uproot our lives and cool off Toronto’s hot real estate market. While it took some time for us to adjust to what has become the ‘new normal,’ the lowrise housing sector bounced back quickly, fuelled by homebuyers seeking more space. People have since become more comfortable getting back into the condo market, which has resulted in a resurgence in prices.
Over the course of the pandemic, there has been much talk about Toronto’s runaway housing market, as prices have continued to set new record highs. Here, I’ve graphed the last three years, so you can easily see how the market has fared from before COVID hit to December 2021, and that prices generally ebb and flow with the seasons to some extent. What’s evident in all three is that the market is resilient and real estate is a great investment option, illustrating the best time to buy is as soon as you can afford to do so instead of trying to time your purchase.
The power of supply and demand was the driver of the Toronto real estate market in the first couple months of 2020, accelerating prices for all home types. By mid-late March, the housing market began to cool as listings dried up amid the start of the COVID-19 pandemic. Prices bottomed out in April, but quickly bounced back in May to surpass 2019’s price high of $929,684. The average selling price for all home types was dragged down in November and December 2020, by the deflated condo market. But prices bounced back in early 2021, peaking in March after months-long buyer frenzy. Prices softened a bit over the summer, which is typical in the seasonal real estate cycle, and then regained momentum with the fall market.
Detached home prices dipped during the first full month of spring in 2020, as a result of the pandemic, and then rebounded due to pent-up buyer demand, peaking in July at $1,541,003. Prices remained relatively stable from September to December, as many people moved to areas outside Toronto in search of larger homes. But by 2021, there was a resurgence in demand for detached homes in the 416 region, especially in fall, which saw the average price for this home type reach $1,807,983.
The condo market was on track to have a banner year in 2020, but it came crashing down in April 2020 due to the pandemic. While it regained some losses the following month and prices remained above 2019’s high of $659,855 for the remainder of spring and summer, a clear split in Toronto’s real estate market emerged in October, as condo dwellers wanted out of multi-residential living, particularly in the downtown core. Prices declined for several months before beginning their uphill climb in early 2021, with the rise in buyer demand. Since then, prices have remained on this trajectory, returning to seasonal norms in summer and ending the year 16.8% higher than December 2020.