Are you thinking about buying, selling or holding when it comes to investing in the Toronto/GTA real estate market in 2020/2021? Trust the Modern Family Realtor team to analyze this question for you since it will vary depending on each individual or family’s personal and financial situation.
2021 Real Estate Forecast
Toronto condos – 2% – 5% decline
Toronto houses – 2% – 4% increase
GTA condos – 1% – 3% decline
GTA houses – 4% – 6% increase
As you can see we are more bullish for the short term in the housing market but see a lot of opportunity in a new buyer’s market for condos to save $25k – $100k off the peaks hit earlier this Spring.
Our MFR team wants to help first time home buyers and investors find amazing condo deals and negotiate strongly to get your prices closer to 2018. We believe when a vaccine is released the condo market will rebound with stronger demand and people moving back to the city.
Pros in 2021
1. Lower Interest Rates – Interest rates have dropped significantly in 2020 to as low as 1.5% and will remain low for many more years to come. This now makes it sometimes cheaper to buy now than rent in the City of Toronto.
2. Buyers Market And Increased Condo Inventory – We are seeing for the first time in a long time a buyer’s market in the condo sector. There has been an influx of more than 400% of resale condos from around 1,500 to 6,455 in mid-October 2020. Buyer’s now have the power to negotiate strongly and get an amazing deal from motivated sellers.
3. COVID-19 Vaccine – When we see a vaccine hopefully come sooner than later we may have a bounce back from the condo market. In Canada, when we open up our borders, Universities, downtown offices buyers may flock back to the city and we will see a rebound in prices.
Cons in 2021
1. COVID-19 – The global pandemic has created a Canadian recession in almost all industries except real estate and technology. Are we immune from the higher unemployment rate and lost jobs? Homeowners across the world have valued home ownership more now since everyone is spending 90% of time at home compared to last year of maybe 50%. That trend has shifted most of the demand to the single family home larger house in Toronto and the suburbs.
2. Recession – The Canadian economy is still running about six per cent below its pre-pandemic level but heavily skewed toward the rental market and lower income earners. Most homeowners are actually saving more money today but there are still some long term risks.
3. Politics – The world may change next year with Biden holding a 81% chance of winning the election. Some feel there will be a positive impact and some negative due to his tax and not as favourable Wall Street policies. Time will tell but we hope for more stability.
Modern Family Realtor believes timing is key for both buyers and sellers. Buy low sell high! As with any big real estate decision you should focus on the long term (say 3 years) and historically the real estate market will always be higher.Please reach out to us for your free real estate consultation to set up your real estate investment plan for 2021 and be proactive in this new buyer’s marketplace.
Feel free to call me directly at 416-705-2444 with further explanation or questions on the above.
Enjoy the holiday season!
Paul Chan Founder Modern Family Realtor