Wow… We made three predictions in January about where the market would go in 2021: busiest sping in 5 years, prices up 10% YoY, and the return of bidding wars for condos. We did not expect all three of those would come true only 2 months later! Not only was March the busiest start to spring in 5 years, but it may also be the busiest March the Toronto real estate market has ever seen. As for price growth, since January all property types have exceeded 10% growth and we are confident that will still be the case by December 2021. Finally, as for the return of offer nights to condos, a listing in Liberty Village recently received a shocking 50 offers…
Average prices: The average Toronto property price was $1,083,322 in March which is up +9.67% (YoY), but up + 8.85%(MoM). Historically, March usually brings an uptick in activity over February as the spring market kicks in. Though, after February set record prices, with the average Toronto home crossing $1 million dollars for the first time, it is quite incredible to see that March’s sale prices easily eclipsed it.
Detached and semi-detached properties saw a substantial increase over March of last year, detached up + 19.42% (YoY), and semi-detached up + 11.47% (YoY). One thing to keep in mind is that the pandemic started last March, and with the complete uncertainty of the lockdown, it brought real estate to a halt for the last 2 weeks of the month, which will skew the data.
Condo prices are relatively flat at – 0.69% (YoY), however, they continue to recover well in 2021, having risen + 4.58% (MoM). Condos hit their peak sales price last March, so it is a welcome sight to see condos have regained almost all the value they lost.
HPI: The Home Price Index provides an apples-to-apples comparison of home prices in the city and reflects a more accurate change in prices. According to this metric Toronto home prices are up + 7.75% (YoY) and most notably, detached properties are up + 17.88% (YoY).
Sales: Sales activity has been through the roof hitting 5,130 units, up double digits across the board both annually + 85.13% (YoY) and + 37.13% (MoM) for all property types. For context, sales were up + 40.37% from January to February, and then up another + 37.13% February to March, all during a pandemic, lockdown, and what is still considered “slow” season. In pre-pandemic numbers, the most sales we saw in Toronto in any given month was 3,234 back in April 2019, compared to 5,130 in March 2021.
New Listings: New listings increased + 47.06% (YoY) driven by activity in every property type. Detached + 44.84% (YoY), Semi + 73.77% (YoY), Condos + 38.72% (YoY). With OFSI proposing new legislation that will make qualifying for a mortgage even more difficult, we expect buyers and sellers to be out in full force in case the rules do actually go into effect on June 1st.
Active Listings: Active listings are up double digits across almost every property type except detached again, – 4.81% (YoY), Semi + 29.47% (YoY), Condos + 27.18% (YoY). Even though active inventory has increased across all property types, there is less than 1 month of inventory in the market right now, which indicates a very strong seller’s market.
For those that have been following the decrease in condo inventory with us for the past few months, here is a quick update on where we stand:
2.01 months – December
1.39 months – January 2021
0.88 months – February 2021
0.77 months – March 2021
Interestingly, semi-detached inventory is at record lows as well 0.57 months and is part of the reason sub $1.5mil prices are appreciating so quickly.
Going into April, we expect numbers to set records when compared to this time last year, which corresponds with one of the slowest months in real estate last year, during the first lockdown. The very limited inventory and the immense amount of active buyers are going to keep bidding wars strong, and keep pushing sales prices higher.
With the anticipation of new rules from OFSI coming into effect on June 1st, there may be a rush in buyers coming to market trying to get in before their affordability is cut by approximately – 5%.