Toronto home prices hit record in 2020 as sales climbed

After seeing buyers compete with multiple offers on homes across the Greater Toronto Area, real estate agent Navid Rashid is recovering from an unusually busy December that capped an unusually busy year.

“December in the past has usually been a very slow month — people want to just enjoy their time off,” said Rashid, a senior sales representative at Trace Property Group. “But this year was very different.”

The average price of a Toronto home sold last year hit a new record as the number of sales climbed 8.4% compared with 2019, the Toronto Regional Real Estate Board (TRREB) said.

The average selling price in Greater Toronto was $929,699 in 2020, up 13.5% from $819,279 compared with 2019, the board’s report said on Wednesday.

The number of homes sold in 2020 in the Greater Toronto Area totalled 95,151, up from 87,751 in 2019, and the third-best year on record, according to the board.

TRREB’s report was just the latest to show how robust the real estate recovery has remained over the course of 2020.

Calgary real estate agents had their busiest December since 2007 last month, and Montreal set December home sales records in every neighbourhood, respective real estate boards in both cities said this week.

TRREB said that after a steep drop in the spring due to the pandemic, the market took off in the second half of the year.

Board president Lisa Patel said the Greater Toronto Area housing market followed an unfamiliar path in 2020.

“Following the steep Covid-induced drop-off in demand during the spring, home sales roared back to record levels throughout the summer and fall,” Patel said in a statement.

On top of shifting the homebuying season later into the year, the pandemic had other effects. Patel pointed to “ultra-low” borrowing costs and virtual open houses and showings as ways that the housing market adapted.

“The next 12 months will be critical as we chart our path through recovery. In particular, the impact of resumption in immigration and the re-opening of the economy will be key,” said Jason Mercer, the board’s chief market analyst.

The results for the full year came as the Toronto board reported home sales in December soared to 7,180 compared with 4,364 in the final month of 2019. The average price of a home sold in December was $932,222, up from $838,662 in December 2019.

Rashid said a major driver of business in 2020 was low interest rates, and that hasn’t changed as the calendar turned to January, he said.

But the board also pointed to a widening divide between the markets for single-family homes and condos. Sales of detached homes were up 15.1% last year, and average prices were up 13.2% from 2019. In the condo market, sales fell 5.5%, with more modest annual price growth of 7.1%.

“The supply of single-family homes remained constrained, resulting in strong competition between buyers, and double-digit price increases,” Mercer said.

In contrast, Mercer said, growth in condo listings “far outstripped” condo sales last year. Total new listings of all housing types was up 66.1% year over year in December, compared with 64.5% sales growth.

In December, condo sales were up 75.4% from December 2019, but prices were down 2%.

“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,” Mercer said.

The split between condos and single-family homes was clear in the suburbs of the Greater Toronto Area.

While condo sales were down 2.6% last year in the suburbs, they were down 6.7% in the city. Detached home sales were up 18.3% in the suburbs and only 4.4% in the city.

Home prices showed a similar trend in December, with South Simcoe County showing the biggest price growth and the City of Toronto posting the most modest gains.

“Now that we’ve entered this new era of just working from home, I think homebuyers are now looking for more living space,” Rashid said.

“People are being a little bit more adventurous and spending more time outdoors. There aren’t many outdoor activities that you can do in the downtown core.”

Nonetheless, Rashid said he has seen buyers of pre-construction condos get their confidence boosted by the rollout of the Covid-19 vaccine and potential reopening of the economy.

“Tourists, an influx of international students and of course, the continuation of immigration growth — now, just to add on to that, condo prices being so low,” he said.

“I think condo living will start to get more exciting and a lot more in demand.”