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If you’re a regular reader of this blog, you know that our usual monthly ‘Market Update’ blogs have been mostly absent this year. With the pandemic greatly impacting the typical Toronto real estate market patterns, it’s been next-to-impossible to provide any meaningful statistics.
In 2020, the normally busy spring market shifted to summer, the typically slower summer market moved to fall, things got weird with condos during lockdown #2, we were hiding inside and hunting vaccines during the usual busy Jan-April market in 2021, then things got wild and bidding wars were off the charts, then things got slow in the summer when we were finally able to do things and see people, and now we’re experiencing a feels-like-normal busy fall market. While headlines like: ’Listings down 49% in September’ and ‘Prices up 31%’ make great clickbait, they don’t really help us understand what’s really happening.
So what can we learn from the September 2021 real estate statistics?
- The condo market continued to make gains:
- The average price of a condo in the GTA was $789,983 in September 2021 and $837,047 in the city of Toronto.
- 5 years ago, the average price of a condo in Toronto was $446,294; that’s an 87% increase or a $390,753 gain in 5 years.
- If you bought this ‘average’ condo 5 years ago, it increased in value by $214 per day. That’s like having a $78,000/year side hustle (tax-free if it was your primary residence).
- Houses continue to be highly desirable:
- The average price of a detached home in the city of Toronto reached $1,778,928 (that’s 19.5% higher than last year). Semi-detached homes were up 13.9% and townhouses, up 7.2%.
- 5 years ago, the average price of a detached house in Toronto was $1,295,482, or 37% lower than today. Since then, that average house increased by $265 per day – the equivalent of a $96,689/year side hustle (again, tax-free if it was your primary residence).
- Buyers still have an appetite for bidding wars. Across Toronto, in September:
- Detached homes sold for 106% of the asking price
- Semi-detached homes sold for 111% of the asking price
- Townhouses and rowhouses sold for 110% of the asking price
- Condos sold for 106% of the asking price
- The number of new listings continues to be lower than usual:
- 13,483 homes were listed for sale in September vs the more usual 15,000-16,000 post-Labour day listings. September 2020 was an anomaly with 20,000+ homes listed.
- There isn’t enough housing supply to meet the demand:
- In a balanced market, we would typically see a 4-6 month inventory of homes – in other words, it would take 4-6 months to sell all the homes currently listed for sale, at the current pace of the market.
- In the GTA in September – we had ONE month of inventory – ONE!
- Things are even crazier outside of the city:
- In the GTA, detached houses were 31.4% more expensive in 2021 than in 2020
- Months of inventory ranged from 0.5 in Durham to 0.8 in Peel to 0.7 months in Halton to 1.2 in York. Crazy!