Corinne McCabe , Broker

Canadian real estate prices are growing at a breakneck speed. More homes were sold in July than any other month on record, with data going back more than 40 years. The performance of the housing market during this pandemic recession has been a big surprise. The price of a typical home across Canada reached $637,600 in July, a 7.56% increase compared to the same month last year. Canadian real estate buyers are shrugging off the pandemic, as a temporary inconvenience. The Canadian Real Estate Association (CREA) data shows prices made a huge increase, not just in known “hot” markets like Toronto, Ottawa, and Montreal but in almost every real estate market across Canada.

The massive increases this year represents a significant portion of gains made over the past 3 years. Montreal real estate prices are up 14.04% in July, compared to last year - making up almost half of the 29.21% increase made over the past 3 years. Toronto’s 10.11% increase over the past 12-months, contrasts with a 14.51% increase over the past 3 years. In Vancouver, prices increased 4.83% over the past 12-months, but just 1.61% over the past 3 years. For Toronto, this means the past year has seen growth twice as fast as the previous two years.

Sales have also been helped by low mortgage rates with rates for five-year fixed-rate mortgages being offered at less than two percent. The robust price growth right across the country, comes even as indicators like employment, rental rates, and immigration fall. When prices rise across the board despite a breakdown of these indicators, its almost certainly a result of too much easy credit.

The real estate market remains hot! July was a record-breaking month for real estate as the GTA reported 11,081 sales - a 29.5% increase over July 2019 and a new record for the month of July. It’s hard to believe we are in a pandemic and the numbers for July are mind boggling. 
We are seeing the results of pent up activity from both buyers and sellers, that has been accumulating over that last few months. Low interest rates and limited overall supply are also increasing competition across our market. Here are some of the results for July: 

AVERAGE SALE PRICE FOR TORONTO - $1,017,320

Up 21% from $839,943 – July 2019

AVERAGE DETACHED FOR TORONTO - $1,541,003

Up 25% from $1,227,301 – July 2019

AVERAGE SEMI-DETACHED FOR TORONTO - $1,181,014

Up 20% from $981,802 -July 2019

AVERAGE CONDO PRICE TORONTO - $682,999

Up 8.8% compared to $627,927 - July2019

NEW LISTINGS - 17,956

Up 24% compared to 14,393 – July 2019

NUMBER OF SALES - 11,081

Up 29.5% compared to 8,595 – July 2019

Price growth was strongest for low-rise home types, notably within the City of Toronto. Despite more balanced market conditions in the condo market, year-over-year price growth remained in the high single digits. We also experienced stronger sales growth in the more expensive detached market sector, which helps explain why the overall average selling price was high. The real estate board has said that its original pre-Covid forecast of 10% price growth for 2020 could still be realized, but it all depends on whether we get a second wave of the virus.

The Ontario government has lifted the ban on public open houses effective today in regions entering Stage 3 and Toronto is expected to follow suit by the end of the month. But is this such a good idea? Will sellers allow them? And will buyers attend? And what about the safety of the Realtor? The topic has become a hot one among real estate agents. Many people would attend open houses as a pastime – even if they weren’t planning to buy right away. Open houses were just an easy way to see homes and sometimes viewed as an ineffective way of driving traffic to a property. So far business has been booming in Toronto and the surrounding regions with no open houses. Sales representatives can now market your home effectively using an array of technological tools that can be accessed easily by buyers. Virtual viewings are now mainstream, have increased in popularity and have a much wider audience reach. Statistics show that consumers using virtual tools are more likely to reach out to a Realtor. If agents had been unable to do business maybe open houses would be necessary, but agents and their clients have adapted to the new ways of doing business. Safety first! 

Last week the freehold market recorded a solid 10% increase in new listings, and overall sales were up a whopping 40% from the previous week. Competition for homes is still strong with 63% of all properties selling at or above the list price While this is frustrating buyers across the 416 that same enthusiasm for home ownership is spreading throughout the province, all the way up to cottage country. 

The condo market continues its positive activity. New listings did not change from the previous week, but sales jumped 40%, the largest jump in weeks. The percentage of suites selling at or above the list price is at 37%. The demand is picking up for condos again.