Real estate agents sold a record 10,563 homes in October, a 25.1 per cent increase from October 2019 as the housing market recovers from spring's COVID-19 slowdown, Toronto Regional Real Estate Board said on Wednesday.
But the recent success of the housing market has not benefited all homeowners equally. While detached homes in the suburbs sold for premiums, the downtown condo market has flattened.
Compare that to the average prices of detached homes, which rose 14.8 per cent to $1,204,844.
"I think you're seeing a shift in terms of where people are purchasing," says Freddy Mak, co-founder Ferrow Real Estate Inc.
Simcoe County has seen benchmark house prices rise more than 20 per cent from this time last year, and Durham Region prices are up more than 18 per cent. In the city, the benchmark price is up a little over 7 per cent from October 2019.
"Working from home, desire for privacy and private outdoor space -- that's what you're getting in suburban markets... People do not want to rub shoulders with each other."
The board's chief market analyst Jason Mercer says that the housing market has now caught up to where it was this time last year, despite a near halt in home sales this spring when the COVID-19 lockdown began.
"Year-to-date home sales through October were above last year's level," Mercer said. "With this being said, we have not accounted for all of the pent-up demand that resulted from the spring downturn."
Mak said he understands why the hot real estate market may be puzzling to onlookers, wondering how prices are rising amid an uneven economic rebound. Low interest rates are one factor helping homebuyers stomach the big purchase, Mak said.
"You're looking at these really great borrowing rates ΓÇª that is going to help fuel the purchasing side for the Toronto real estate market," said Mak. "I think if people look at real estate as sort of the most stable investment, the most long-term investment ΓÇª in this challenging time."
But the pandemic has pulled buyers away from investing in downtown condos and toward more spacious detached homes with yards, according to board president Lisa Patel.
As buyers competed over limited listings for detached homes, the number of condos listed for sale this October was double the number of condos that hit the market in October 2019.
Condo sales rose 2.2 per cent overall compared with this time last year, but fell 8.5 per cent in the city of Toronto and increased 28.4 per cent in the suburbs.
"In past years -- hot sellers' markets -- condos were selling in three to five days," Mak said.
"You're probably going to see listings in the 30- to 60- day sale cycles now, as opposed to three, five day cycles ΓÇª I feel it's almost a good problem to have as a buyer. It's like having too many options."
The selling spree for condos comes after the rules changed in September for short-term rental websites like Airbnb. Investors in Toronto are no longer allowed to have a separate home that's solely used for renting out for days or weeks at a time.
On top of that, it's harder for landlords to find renters -- such as tourists, students and young professionals -- in the downtown core amid travel restrictions, virtual learning and lingering joblessness during the pandemic.
"Pre-COVID polling had already pointed to an increase in investor selling in 2020," said Patel. "The pandemic only added to this trend with a stall in economic growth and a halt to tourism impacting cashflows for many investors."
Mak said that despite the wave of new condos on the market, the overall demand to buy homes is still outpacing the number of new listings -- thus, prices are rising on the market as a whole. Immigration, which slowed during the pandemic, could also spur demand if policies change going forward.
"People want suburbia. They want that detached single home -- or even townhome, semi-detached," said Mak. "And that inventory is very, very limited."
With new cases of COVID-19 reaching daily highs in Ontario this week, Mak senses a split among sellers.
"We're seeing both ends of the spectrum. We're seeing people say, `COVID is still here, still prevalent, and I don't want to show my property because I don't want people coming in,"' said Mak.
"On the other end is people that want to sell that want to take advantage of the higher prices."
This report by The Canadian Press was first published Nov. 4, 2020.