The brokerage predicts rising prices due to low inventory, while MPAC reports Toronto added $11.65 billion in property value in 2020
Real estate brokerage Royal LePage forecasts that home prices in the Greater Toronto Area (GTA) will rise 5.75 per cent in 2021.
The firm’s 2021 market survey forecast estimates the aggregate price of a home in the GTA home will reach $990,300. The median price of a two-storey home is expected to rise 7.5 per cent to $1,185,800.
The agency also forecasts that the rise in condo prices in the 905 real estate market will offset the dip in Toronto. They forecast the median price of GTA condominiums to rise only 0.5 per cent to $600,800.
“Low inventory is expected to put upward pressure on prices but we could see low unit sales if there isn’t product to sell,” says Royal LePage vice president Debra Harris in a statement.
Harris also invests hope in the vaccine, assuming post-secondary students will be ready to return to the city in the fall and Canada will hit new immigration targets. Those developments would open the gates for new demand to soak up the condo listings flooding the market.
“The question is whether consumer confidence in the condo market will be healthy given the surge in listings,” adds Harris, explaining that the new supply is there to meet the demand that a previously starved real estate market was asking for. “The reality is that current inventory is much healthier than where we were last year.”
Royal LePage’s forecast for the Toronto real estate market is generally in line with the rest of Canada. The brokerage estimates Canadian home prices to rise 5.5 per cent by the end of 2021, once again due to low inventory.
They expect the price gains to be greater in Montreal, Halifax, Vancouver and Ottawa, rising 6, 7.5, 9 and 11.5 per cent, respectively.
The report from Royal LePage comes at the same time as various announcements from agencies assessing the Canadian and Toronto real estate market.
On Tuesday (December 15), the Canada Mortgage and Housing Corporation (CMHC) announced an increase in housing starts in November, indicating greater construction on new homes.
Also on Tuesday, the Municipal Property Assessment Corporation (MPAC) released its annual assessment rolls in Ontario. Property value in the province topped $3 trillion, increasing $37 billion.
And Toronto is the fastest growing among the cities, with $11.65 billion increase in 2020. That figure comes strictly from renovations and new construction. MPAC did not reassess all other property values.
“In 2020 Ontario saw more than 36,000 new residential units and 16,000 residential condominium units,” said MPAC president Nicole McNeill, in a statement.
“And with people spending more time at home this year we saw a 28 per cent increase in the number of renovation permits this year as people invested in making improvements to their homes.”