They called it “the best September on record for Toronto home sales.” 42.3% more homes closed last month than was the case in September of 2019. Over 11,000 homes were sold, and the average sale price approached just under $1 million at $960K. Prices jumped 14% from September 2019 levels, and it’s safe to say that Toronto real estate has now comfortably exceeded any price and demand levels seen in the last craze several summers ago. Realtors exclaimed the blockbuster numbers on the ever lower mortgage rates, courtesy of a Bank of Canada that has signalled that rates will be this low for ‘years to come.’ Prime mortgages at TD are now trailing in the low 2% range, down from the already low 3.3% range seen pre-COVID.
Realtors also pointed to the fact that uncertainty and difficulties created by COVID-19 formed pent up demand. The weakness in the condo market was offset by the gold plated low rise and detached market. All of this occurred as polling in late September showing confidence among Canadians as being sky-high in the long term fundamentals of the market. Over 44% of Canadians polled expect real estate prices to rise over the next 6 months, COVID-19 complications notwithstanding. Those polled who expressed the opposite view fell to 27%, the lowest in many months. The pessimism of the impacts of COVID-19 on the real estate market is dead and buried – the exact opposite sentiment has been generated by the pandemic.
All of this largely fits into the longer term predictions by the commercial banks and the Bank of Canada. Predictions show that while prices and demand may rise in the final quarter of 2020, the big institutions expect next year to be a rough one – all largely because of uncertainty and the potential for crises arising. We’ll have to wait and see what 2021 holds. Mirroring what happened in Toronto, real estate dynamism was marked in Vancouver, where sales rose 56.2% in September. The numbers in BC’s Fraser Valley were even higher, at an astronomical 66.1% higher in September compared to a year earlier. The picture in Ottawa and Montreal was also very promising. The next few months should be good for southern Ontario real estate.