Unprecedented traffic continues to drive luxury housing in the Greater Toronto Area

While the second quarter of 2021 lacked the uber-exuberance of the first, overall home buying activity continued at a breakneck pace in the Greater Toronto Area (GTA). The number of homes sold between January and June topped 70,000, up almost 95 per cent over the 35,972 units sold during the same period in 2020, and moving at a rate set to surpass the 2016 record for annual sales (113,040) by year-end 2021.

Values have also risen in lock step, with the average price of a home in the GTA up 21per cent to $1,075,636, almost $200,000 higher than the $891,167 posted one year ago.

With more than 30 years of experience in real estate, I have yet to come across a marketas unrelenting as the GTA in 2021. We’ve had an unprecedented amount of traffic atmultiple price points this year.

Demand for luxury product – both freehold and condominium – remained exceptionally robust throughout the six-month period, with the lower end of luxury sales climbing more than 200 per cent ahead of year-ago levels. 2021 sales over $2 million have eclipsed all previous years at 4,259 units, rising 255 per cent ahead of last year, and almost 72 per cent ahead of the earlier high of 2,483 sales reported in the first half of 2017.

The pandemic has continued to underscore the importance of home ownership. Despite the accelerated roll out of Covid-19 vaccines in the second quarter of 2021, buyers throughout Canada, the US, and abroad are positioning themselves for the next potential lock-down. The disposable income saved over the course of the pandemic, coupled with interest rates at historical lows, are providing a launch pad for many to enter and/or move-up within the GTA.

Limited supply hampered luxury home sales yet again in the second quarter, particularly in the centre of the city, sparking multiple offers in areas like Yonge-St. Clair, Forest Hill South, Rosedale, and Lawrence Park South. Many of these homes were priced well-below market value, adding to the feeding frenzy, and leading to sales hundreds of thousands of dollars above ask. A continuation of tight inventory levels should prompt further price appreciation.

Although the bulk of luxury sales occurred under $5 million, demand at higher price points reached record highs in the first half of 2021. Twenty-one homes over the $10 million price point changed hands between January and June of this year, setting a new benchmark in the Greater Toronto Area. Many of those sales occurred in the Bridle Path area, where gated estate homes situated on large acreages represent the pinnacle of success.

With a return to normalcy both in Ontario and across the country, life as we knew it pre-pandemic, will resume. Hard-hit industries like hospitality, tourism, and retail will soar as consumers return with a vengeance. Special events postponed as a result of Covid-19 will finally occur, gatherings with family and friends will have new meaning, and travel will once again take flight. But the lessons learned during the pandemic will largely influence our decisions for many years to come.

Canada’s performance in terms of share of population vaccinated ranked 12th globally, with 69 per cent vaccinated and 39 per cent fully vaccinated, according to the nytimes.com (July 8, 2021), should bode well for the country. Canada’s success with its vaccination program, combined with its reputation as one of the best countries in the world to live in, will ensure that immigration will continue unabated once borders are relaxed. Over the next three years, the Liberal government has committed to an immigration plan that will bring 1.2 million new permanent residents made up of skilled workers, family members and refugees to Canada, with at least half expected to settle in Ontario.

While strong tailwinds should potentially propel the GTA housing market to new heights by year-end, the prospect ofa federal election and a new budget that focuses on increased taxation could temper home-buying activity to someextent. However, given the impetus that’s driving this market, only time will tell.

For all of us, at Barry Cohen Homes, it is an exciting time as we have been recently selected as the exclusive brokers for the Greater Toronto Area and Ontario’s premier cottage country by Forbes Global Properties. Our exposure through Forbes’ massive global network will ensure that our select luxury properties are viewed by an audience that spans all seven continents. Adding a powerhouse brand to our marketing mix is exceptionally exciting for us and will prove to be a game changer for our clientele. If you’re in the market to buy, sell, or just curious about the value of your home in today’s market, please don’t hesitate to reach out.

All the best and stay safe,

Barry Cohen