By: Mark Allen and Ari Armani

November 2020 - GTA Real Estate stays up! Mixed Messages for Canada's Economy!

Tags: Analyst, Toronto, Housing, Economic Growth, Markets, Real Estate, Investing, COVID, Home Sales, Market Stats, Economists

November 2020 - Market Update

The GTA Real Estate market continues to forge ahead with sales up 24.3% and price gains of 13.3%, year over year, for November 2020. The overall average GTA price for all housing types in November was $955,615. Notably, we've seen the GTA overall average price increasing month over month, since February/March 2020 and since June 2020 - to new record highs each month and this remained the story until the month of October, whereas now November has come off the highs.

 

Semi's led the way for sales in the 416 with a 36% boost, year over year, and Semi’s also took the top spot for price gainers with an 8.8% move up in price for November 2020. Condos lag and sales came out at .8%, while price declined -3% for the 416 area and for the GTA as a whole Condos saw a 7% sales gain and a -2% price change1. Currently, for the condo market building inventory levels, price and presentation are the determining factors for a successful sale. We think the condo market will pick up again in the near future and we are redundantly exclaiming now is the time to buy a condo in the core of Toronto.

 

Trends and Opportunities: 
The biggest trend of 2020 remains a flight to the suburbs and even rural detached homes as posted in the 905 sales numbers with a 33% sales boon to a 19.2% price uptick in November. Will cottage country become the new burbs? Time will tell-however, we wait to see what will happen when businesses call employees back to the office in the city. Yet, it is clear that detached suburban homes again maintain the top spot as the ultimate housing commodity. Toronto Semi’s and townhomes were the hottest housing types per sales during August, September, October & November in the 416 – this trend moves along as the price gap hovers wide from Semi-Detached, trading at $1.16M compared to $1.477M for November 2020.


Now back to the Condo Market, which has been experiencing price flattening due to an influx of supply. New GTA Condo listings are up 80%(which has come off October number of 103%) year over year, and active listings are up 176%(up from October-inventory malaise) in November 2020. Why? Reasons most likely remain flight to the burbs for more space, investors offloading tenanted units, and other various lockdown reasons still seem most plausible. If you are a buyer or have been even thinking of buying a Condo - here is your chance!! From the trenches, the market is slow/flat and you can get a deal in the right micro-market. Also, renters is it time to get a bigger unit? There is negotiation room as rental listings flood that sector of the market - ultimately due to numerous outside factors alike the sales market; mainly AirBnB, Less immigration, Flight out, Tourism loss. However, we recommend purchasing a condo wherever/if possible due to the market conditions and record low-interest rates.

If you’re already living in the outlying areas of the GTA – do you Sell your detached and buy a condo, or move further North? There are ways to capitalize on the delta between lower priced housing options, or locales if you’re a downsizer. All told the market is still a bit of a mixed bag right now due to the rolling lockdowns, leftover pent-up demand held up in city condo sales, low rates and FOMO. And we may continue to see these trends progress through the fall and winter market - come winter detached home demand tends to soften as condos bolster so it will be interesting to see what happens. Like we’ve been saying since the beginning of the Pandemic your scenario is case by case, minute by minute, now, and it’s vital to dissect it and understand it fully. Call us to gain clarity! We are predicting when Government decides to fully relax COVID lockdowns and travel restrictions, along with new immigration that Toronto will ultimately benefit the most and will enter a roaring recovery period bringing the condo market along for the ride.


Economic Snapshot: 
The economic landscape in Canada is still manoeuvring through a trough attempting recovery in the business cycle - Real GDP numbers on an annualized basis(this is the most confident indicator) were up for Q3 2020 posting a gain of 40%1 after a Q2 loss of 38%2. However, we are realists and the new lockdowns may hamper the Q3 gains – something Economists call a false start recovery, or a false signal. We all know that Canada and Toronto are pre-dominantly service-based economies. Although, the current goods to services ratio has been de-railed by lockdown measures as monies exit Canada for goods and services suffer. Recent information shows Canada’s service sector dropped twice as much by 16.7% as the goods sector only took a hit of 8.7%3. Business associations and Governments need to encourage creative ways to support the service sector through COVID restrictions.

Employment growth is currently on the mend. Toronto employment growth was down -3.5% in October 2020 compared to -8.1% in August and -11.5% in July4, while Canada’s employment rate grew by .3% in November5. With continual changes in restrictions and complicated lockdown measures the mended employment market may start to flatten.

The Bank of Canada has maintained their monetary stimulus QE program, however, lessening the amount spent from $5B to $4B per week, all while calling on Government to provide more fiscal policy stimulus(from October). Bank of Canada also held interest rates recently at the lowest historic level of .25% and BoC has asserted low rates will be mainstay until at least 20236. On the tip of all the stimulus and various other macro and micro factors, equities markets forge ahead as they are predominantly forward-looking. With the recent news of a 90%+ effective vaccine, hope for a stimulus breakthrough in the US and now vaccine rollouts the Dow reached new all-time record highs at 30,200 pts+, a TSX surge followed and a new hopeful timeline for a new normal7. Going forward into 2021 we hope to see the trough break into a full recovery period with the help of these low rates, unhindered private enterprise, job growth, consumer confidence and ultimately healthier markets.


Questions or looking to make a move? Email us: info@origingroup.ca or call 416 205 0355 ask for Mark or Ari. 

1,4TREB data from and full TREB numbers here - https://trreb.ca/files/market-stats/market-watch/mw2011.pdf 
2GDP Stats here - https://www150.statcan.gc.ca/n1/daily-quotidien/200828/dq200828a-eng.htm

3https://www.theglobeandmail.com/business/article-canadians-are-buying-record-amounts-of-goods-services-not-so-much/

5https://www150.statcan.gc.ca/n1/daily-quotidien/201204/dq201204a-eng.htm

6https://www.bankofcanada.ca/2020/10/fad-press-release-2020-10-28/

7https://markets.businessinsider.com/news/stocks/stock-market-news-today-indexes-records-jobs-report-stimulus-deal-2020-12-1029866393



#Toronto #RealEstate #GTA #MarketStats #Markets #Canada #Condos #Homes #SuburbanFlight #COVID



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