Adjustment period provides breathing room for buyers
As Ontario enters step three of its roadmap to reopen and pandemic restrictions are lifted, in-person open houses have once again resumed for sellers and buyers, adding to the continued sense of optimism in the Toronto real estate market.
Effective July 16, open houses once again are permitted with capacity limited to allow for the physical distancing of two metres. With that development, we see more traffic to our listings, and there is a high level of optimism for life in general as summer unfolds and life gets back to normal. By the end of the summer, after everyone has enjoyed their time off, we expect the real estate market will generate even more momentum.
June home sales were up compared to last year but somewhat below the March 2021 peak. This is consistent with the regular seasonal trend. The average selling price in June increased by double digits compared to last year, but the annual rate of increase moderated compared to the previous three months.
According to the Toronto Real Estate Board’s statistics, in the GTA, there were 11,106 sales through the TREB MLS system in June 2021 – up by 28.5 per cent compared to June 2020. Looking at the GTA as a whole, year-over-year sales growth was most robust in the condo apartment segment, both in the City of Toronto and in some of the surrounding suburbs.
In all major market segments, year-over-year growth in sales well outpaced growth in new listings over the same period, pointing to the continuation of tight market conditions characterized by competition between buyers and strong price growth. On a month-over-month basis, both actual and seasonally adjusted average prices edged lower in June.
The average selling price for all home types combined was up by 17 per cent over the same time period to $1,089,536. While price growth continued to be driven by the low-rise segments of the market, the average condominium apartment price was up by more than eight per cent compared to June 2020, well-outstripping inflation.
What we continue to see right now is more of a balanced market, which is an excellent position to be in, especially for buyers because they can take some time to reflect on the property they are looking at and return the next day to make a decision. The reality is that properties are still selling in less than 30 days on average as long as they are priced well and prepared appropriately for their target market.
Buyers want comfort and updated features
Overall, people are looking for comfort right now, including greater outdoor space to enjoy time with family and friends. Many people want to buy a move-in-ready home – fewer buyers are willing to put in the work to renovate a home before they move in. Sellers who have spent the time, money and energy to update their home and bring it to a new level of finishes tend to do better than a home renovated or built 20 years ago. With contractors and materials in short supply, it also poses a challenge to those who want to buy and have to renovate.
The sense of urgency that existed for many buyers three months ago is not as prevalent, but there are just as many active buyers looking for the right home. However, given that the pressure is not as intense right now, they may take their time to make decisions. All properties that have entered the market, at every price category, as long as they have been presented well and priced according to market conditions, have sold. It might have taken 15 to 20 days, but the listings are selling, and it’s a calmer market for buyers.
Torontonians are so used to a high level of market intensity, and sellers have high expectations; therefore, sometimes, they can lose sight of the fact that niche properties might take longer to turnover. Buyers often have a level of fear that anything they look at might go into multiple offers. Even if there are not multiple offers occurring, they will still have to pay a premium.
What we see right now is an adjustment period, and that’s to be expected after having such a heated market over the last year. The expectation is that in September, there will once again be pent-up demand and people will also be less distracted with summer activities, and the market will become more active. Will it be as heated as it was six months ago? Probably not, but will it be at a faster pace than right now? Absolutely.
If you’re thinking of making a move in the near future, it’s always good to consult with a real estate professional six months or even a year in advance so that you can be well prepared for the market whenever the time comes. Enjoy your summer and let us know if we can assist in helping you find your next home.
Thinking about making a move in Central Toronto? Whether you’re buying or selling in the future, we can make it easier. Contact us here to speak to a member of our team.