The Greater Toronto Area’s (GTA) real estate market had its busiest December on record and its third busiest year, which helped push the average selling price to an all-time high.
The Toronto Regional Real Estate Board (TRREB) says 7,180 homes were sold during the typically quiet month of December for a 64.5 per cent year-over-year jump. For all of 2020, 95,151 changed hands – up 8.4 per cent compared to 2019.
A shift into higher-priced detached homes, a trend that has been playing out since summer, helped push the average selling price to $932,222 in December, which is an 11.2 per cent year-over-year increase. For 2020 the average selling price rose 13.5 per cent to $929,699.
The average selling price is subject to distortions based on property-type sold. The MLS Home Price Index (HPI) tries to smooth those out and it rose 11.2 per cent year-over-year in December to $909,500. Thought it represents a small sliver of the GTA market, South Simcoe County lead the way with an HPI that was up 24.45 per cent, followed by Durham Region at 21.65 per cent.
Record-low interest rates have helped fuel the rally, especially as more people worked from home. But high price tags mean buyers are out of luck unless they have big down payments.
Condo sales and prices haven’t kept up with explosive gains in the detached segment, so TRREB thinks that could be the place for first-time buyers to focus.
“The supply of single-family homes remained constrained resulting in strong competition between buyers and double-digit price increases.”
“In contrast, growth in condo listings far-outstripped growth in sales. Increased choice for condo buyers ultimately led to more bargaining power and a year-over-year dip in average condo selling prices during the last few months of the year,” said TRREB chief market analyst Jason Mercer, in a release.
With that said, the GTA’s condo market has played catch up with a 75.9 per cent increase in sales for the 416 area code region, and 74.5 per cent in the 905.
“It’s anticipated that as the vaccine is rolled out and WFH is phased out for some people, offices downtown should open up, students will return, and we should see the market pick up for sales of downtown condos by the end of 2021,” said Trace Property Group Sales Representative, Mark Tang.
“To date, we’re already beginning to see prices flatten out, which is good news for sellers. Even amidst this, condos with a good location, a sound and well-built building with good layouts will always sell.”
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.