2021 GTA Real Estate Market Set a Record

Although we saw a dip in the number of residential properties that sold in the month of December 2021 compared to December 2020 – but 2021 overall experienced a record number of sales.  In 2021 residential real estate sales were 121,712 which was 7.7% higher than the previous high of 2016 when we had 113,040.  However, for the entire year 2021, the number of sales and in comparison to 2020 sales were up 28%.  

Sales were driven by a dramatic spike in demand and by record-low mortgage rates as well as a tight supply of new listings.  The average sale price in 2021 was up 17.8% compared to 2020.  Despite our continued struggles with COVID, the demand for residential properties remained high through 2021.  

What stood out in 2021 in the City of Toronto was a resurgence in sales of all housing types including condos.  However, the suburban areas of the GTA continue to see on average higher price appreciation across all housing types than the City of Toronto.

Greater Toronto Area (GTA) December Market Update

Across the GTA in December 2021 we experienced a slow down in the number of sales compared to December 2020 but the slow down was not a result of lack of demand but limited supply of new listings did not meet the demand and as a result, we saw continued pressure on the average sale price.  The average sale price was up 24.2% compared to December 2020 but the number of sales was down -15.7% compared to December 2020.  That was also reflected in how quickly homes sold in December – we saw the number of days it took a home to sell drop by -41.2% from 19 days to 14 days compared to December 2020.

Although the City of Toronto Saw Resurgence the Suburbs Continue to Outperform

Although the City of Toronto has definitely experienced a resurgence in the demand for residential real estate the suburbs continues to experience strong average price appreciation across all residential housing types as depicted below.  Once COVID is behind us and we get back to more of a normal working situation I have no doubt the demand for residential property in the City of Toronto will once again experience a dramatic spike.  Now maybe a great time to buy a home in the City of Toronto before the spike occurs. 

2022 Housing Market Outlook

We have started 2022 with a record-low inventory of residential properties for sale and demand continues to remain high.  I project that 2022 will continue to be a seller’s market with demand outpacing new listings.  However, I do expect that appreciation will most likely slow down a bit and will probably be in the range of 10% - 12%.

If you are thinking of selling do not wait for the spring market.  Demand is high now and there are very few homes for sale right now with many buyers eager to buy to take advantage of the record low mortgage rates.  It is also projected that interest rates will start to increase this year to manage the inflation that we currently are experiencing.  However, I do not expect that the interest rate increases will have a dramatic impact on the real estate market.

In 2021 we had 400,000 new immigrants come to Canada which is well below what the Federal government had projected.  I expect that we will continue to see increased immigration in 2022 and beyond which will undoubtfully continue to place pressure on the demand for housing for some time to come. 

The economic indicators are implying that the market will remain strong in 2022.  Interest rates may start to creep up but will still remain at an all-time historically low.  Immigration will continue and as a result demand for real estate will remain high. 

I frequently get asked by clients when is the best time to sell and buy.  If you already own real estate – the right time to sell is now.  In reality, if you are selling and buying it doesn’t really matter when you sell.  If it is a seller’s market, you will sell your home for more and the next home will also cost a bit more but it is all relative – vis-versa, if prices are down the next home will cost less so it all evens out when you already own real estate.

However, if you are a first-time buyer – do everything you can to get into the market as soon as you possibly can.  I recommend buying whatever you can afford and start building equity and continue to save – owning real estate is in essence a forced saving processing as you gradually pay down your mortgage and the property will increase in price over time. 

Do you have any real estate questions?  Reach out it would be my pleasure to help.