The Toronto Real Estate Area (GTA) experienced the second-highest home sales level on record for the month of October. The number of new listings is not keeping up with sales and as a result, putting upward pressure on sale prices. The number of new listings was down 34.1% in comparison to October 2020. Hence, we continued to experience aggressive bidding wars for many homes. In addition, we are now seeing a huge surge in demand for condos – and we experienced double-digit appreciation for condos both in the City of Toronto and suburbs.
Our current housing market challenge is being driven by two factors: a shortage of new listings and continued low-interest rates. The feedback that I am hearing from homeowners is that they are worried about selling their home and possibly not being able to find another home in our current low supply of homes for sale. The Bank of Canada recently implied that they may start to increase interest rates to manage inflation but my belief is that interest rate increases will begin to creep up but we will not see significant rate increases in the foreseeable future.
Greater Toronto Area (GTA) Market Update
In October 2021 we saw slippage in the number of new sales but demand remained high and the drop in sales volumes was a reflection of having a low volume of homes and condos for sale, new listings were down 34.1 in October 2021 compared to October 2020. In October 2021 listings sold on average in 13 days whereas in October 2020 listings were selling on average in 17 days. Although sales activity has dropped average sales price is now $1,155,345 which is a 19.3% increase from October 2020. Demand for housing remained very strong in October 2021 with many properties selling in bidding wars.
The Federal Liberals have made election promises to improve housing supply and affordability a focal point in the recent election. To effectively address the current housing supply challenges the Federal government needs to work with provincial and municipal levels of government to address housing supply shortages that will ultimately address affordability. I am a strong believer that no other government incentives will effectively address affordability until the supply of housing increases.
All housing types have experienced upward price increases in October and we are definitely experiencing a bounce-back of the condo market in both the City of Toronto and the suburbs. From an average sale price perspective, all housing segments continue to see higher price increases in the suburbs than in the City of Toronto. The bounce-back of the condo market is a result of the higher vaccination rates and students and employees starting to return back to the City of Toronto.
The demand for housing continues to outstrip the supply of new listings. At the end of October, we had about 3 weeks of inventory assuming that the sales volume we experienced in October continues into November. Which based on what I am experiencing the October trends appear to be continuing into November with many buyers looking to purchase the limited number of homes up for sale. I have experienced and seen many homes sell within a day of the home being listed and we are starting to see this trend now overflow into the condo market.
As immigration continues to open up we will most likely continue to be in a seller's market right into 2022 and beyond. The Bank of Canada has implied that they will most likely start to increase the overnight rates but we will most likely not see significant interest rate hikes in the foreseeable future hence making mortgages and money relatively cheap and this will continue to drive demand for houses and condos.
Are you thinking of buying, or selling or if you have any questions reach out.