Market Commentary by Barry Cohen

As I write this message, we are closing the door on one of the strongest first quarters in the history of the Toronto Regional Real Estate Board for overall housing sales. Just over 33,500 homes were sold between January 1 and March 31, 69 per cent ahead of the same period in 2020, and almost 33 per cent ahead of the previous record of 25,239 units, set in the first quarter of 2017.

Market drivers have been numerous, but front and centre remains the validation of real estate as an asset class. The roof over our heads is now one of our greatest wealth accelerators, especially in the Greater Toronto Area (GTA). This is of particular importance at a time when traditional savings vehicles such as GIC’s are generating tepid returns and stock market performance is increasingly volatile, setting new records one day and dipping the next.

Not surprisingly, sales of luxury freehold and condominium properties have been exceptionally robust in the first quarter of 2021. Five hundred and thirty-six properties changed hands over the $3 million price point, up 225 per cent over the 165 sales reported during the first quarter of 2020. Activity is brisk in the top end of the freehold market, with the percentage increase in the number of homes sold over $3 million rising into triple-digit territory in 10 of the 14 neighbourhoods examined this quarter.

Lawrence Park, the Bridle Path-Sunnybrook-York Mills and St. Andrews-Windfields-Hoggs Hollow saw the greatest number of sales over $3 million in the first quarter of this year, while the highest percentage increases were recorded in Leaside, Lawrence Park South, Banbury-Don Mills, Casa Loma, and Rosedale-Moore Park. Average price (over $2 million) soared across the GTA as demand outpaced supply, leading to double-digit year-over-year increases in Rosedale-Moore Park, Bridle Path-Sunnybrook-York Mills, Lawrence Park South, Leaside, BanburyDon Mills, Forest Hill North, and Humewood-Cedarvale.

While domestic buyers have been behind the surge in luxury sales in the first quarter, there have been an increasing number of foreign buyers filtering into the GTA market in recent weeks. As global borders open and immigration resumes, demand for high-end product is expected to escalate. This, at a time when tight inventory levels are reported throughout much of the province and supply of luxury properties in some GTA hot pockets are down to single digits.

Despite yet another, more dangerous wave of Covid-19 making its way through Ontario, buyers continue to search for homes that provide enough space to comfortably accommodate the new norms -- working remotely and online learning. Space will be an all-important aspect of buying a home moving forward, whether it’s in the 416, the 905, or beyond, as the effects of the pandemic linger long after the last vaccine has been administered.

The roll-out of the vaccine, while slow and often frustrating, has provided some comfort to Canadians overall. From an economic perspective, GDP growth is gaining momentum and interest rates should remain relatively low for the foreseeable future as the Bank of Canada attempts to stimulate economic expansion. Canadians are sitting on an estimated $181 billion in savings, with literally nowhere to spend (or for that matter, invest) it, so it’s unlikely that the demand for real estate will taper anytime soon.

Given the brisk changes in the market, the services of a knowledgeable realtor can prove invaluable. With decades of experience in dealing with luxury real estate, our team has successfully navigated many different markets. Whether you are trading-up, down, or laterally, to a house or condo, our team can guide you through the process and help you to attain your goals and objectives. We’re just a phone call away and never too busy to offer advice.

All the best and stay safe,