According to a May 7, 2021, report by the Canada Mortgage & Housing Corp. (CMHC), the agency predicts home prices could rise as much as 14% during the second year of the pandemic, as low interest rates continue and fuel demand across the country. The prediction is slightly lower than the real estate industry’s own forecast for double-digit price and resale increases, but bullish compared with the previous year, when CMHC shocked the market with a dire outlook that home prices were going to plummet 18%.
Home sales in the GTA set a new record for April and more than quadrupled that from April 2020, the first full month of the pandemic. There were 13,663 sales through the MLS system for April up a staggering 362% compared to April of 2020. New listings followed a similar path with 20,825 coming to market in April, up 237% compared to April of last year when the impact of Covid was at its worst. The average selling price of $1,090,992 was up by 33% compared to April 2020.
There are early signs that the rental market may be starting a comeback. In the first quarter of 2021, average condominium apartment rents were down on a year-over-year basis, however growth in rental transactions outstripped growth in the number of units listed over the same period, suggesting that rental market conditions are starting to tighten up once again.
Toronto’s condo sales recovery began in December and is continuing to build momentum with significant volume and strong double-digit sales growth. While the condo market was slower to recover compared to the freehold sector, there has been a marked increase in condos since the beginning of 2021, and this interest will likely continue to increase as the economy improves.