The real estate sector in Toronto is starting strong this year. All housing categories including condos are expected to surge 10% in price this year exceeding an average of C$1 million. Although the pandemic had a negative effect on the economy, it may be the reason Toronto’s real estate sector is starting strong.
Sales of Toronto homes have increased by 50% in January compared to the same period last year. The increase in home sales hit an all-time high because of the lower interest rates and the economic recovery in white-collar employment. This means that employees that work as accountants, consultants, lawyers among other jobs are receiving above-average earnings which they can spend on buying homes. Additionally, the Toronto Regional Real Estate Board released a report on Monday explaining that lower mortgage rates have led to increased demand for bigger homes.
Toronto’s home prices are expected to reach $1.025 million this year, including condos. As a result, Toronto joins Vancouver as the second city with an average home above C$ 1 million in Canada. However, demand for homes in the Greater Toronto Area stays strong with all of the motives mentioned above. Also, the economic recovery in Canada tempts people from other cities to rent in Toronto. An IPSOS research showed that 64% of homeowners bought earlier than expected and 35% of participants are expected to buy a home in Toronto.
With the increased demand for houses and the surge in home rent for the middle class, housing affordability has turned into a national political issue. Toronto is exploring the possibility of imposing a tax on empty homes in Toronto, to deter people from renting a second home in Toronto in order to provide homes for those who need one. Additionally, the federal government proposed taxes on foreign, non-resident homeowners to make housing more affordable to first-time homeowners.
References:
1) Altstedter, A. (2021, January 8). Toronto Home Prices on Pace to Top C$1 Million After Record Year. Retrieved February 11, 2021, from https://www.bloomberg.com/news/articles/2021-02-08/toronto-home-prices-on-pace-to-top-c-1-million-after-record-year
2) Kalinowski, T. (2021, February 08). Toronto-area home prices to surge by 10% this year - average to surpass $1 million by end of 2021. Retrieved February 11, 2021, from https://www.thestar.com/business/2021/02/08/average-resale-price-of-gta-homes-to-pass-1-million-for-first-time-toronto-real-estate-board.html
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