December Market Update -- Last month of 2020!
Friday Dec 11th, 2020Share
Another record month of real estate sales for the GTA and Covid 19 had nothing to do with it!
There are 5 major factors that are keeping the real estate market at record levels:
- Ridiculously low interest rates (1.5%) attracting new buyers into the market who can now qualify to buy.
- A strong economic recovery for many business sectors.
- Many Canadians ”cash” rich from not spending on trips etc. as well as getting government subsidies.
- Continued strong immigration causing limited inventory of available homes.
- Threat of an increase in the foreign buyer tax, causing a rush to buy now for investors.
These factors impacted the sales in November to 8,766, a new record high, up 24% compared to November last year. The average sale price year to date now stands at $929,433 up almost 12% over the start of the year.
The city is like a living breathing organism, movement going into the city with an intake of breath, and movement out of the city as the breath exhales. The trend to move out of the city had already started and was exacerbated by Covid 19. Young people bought downtown condos and moved to where the bars, restaurants and excitement were. Now several years later, their condos had doubled in value, their salaries had increased, marriage and perhaps children had ensued, and they were now ready for the life of suburbia. Years from now, with children grown, they will move back into the city to enjoy the convenience of city living that they had had in their youth. And so the city breathes.
Along with that natural movement, the lack of AirBnB users, media overblowing the impact of Covid 19, 416 condominium sales did not keep up to the price increases experienced by other sectors of the market. Here are the facts of 416 condominiums in November. 1,375 condos sold, .8% more than last year, average price down 3%. Not as bad as the media lead us to believe.
416 condos are the “hot” buy for the next 6 months, because by then with the vaccines coming on board, AirBnB back, and the return of foreign students, condominium sales will “catch up “ with the increases seen by other housing sectors.
If you are considering an investment in real estate, let’s talk, after all, you do have a friend in real estate.
We can now see the light at the end of the Covid tunnel, too early to celebrate yet.
Be patient, stay safe!
All the best to you and your family in the holiday season and throughout the New Year!
Your Friend in Real Estate.
Patrick Chung, Broker