The last two years have been unprecedented in many ways, and these unique conditions have extended to the real estate market. Following a drop in prices and activity early in the pandemic, there was a strong rebound. What’s followed has been a long stretch of broken records that nobody could have predicted.
With 2022 on the horizon, understanding what happened in 2021 can help us see what’s coming up. Let’s take a look at the past year in real estate—and the one that lies ahead…
The impact of the pandemic
There’s no denying that this year has been unlike any other. Without a doubt, 2020 will be remembered in part for its real estate market’s ups and downs. Demand and activity plummeted at first—but then, as unexpectedly as it dropped, it rebounded. Not long after, it was thriving (in part because the value of having more personal space and some outdoor square footage increased).
It was all about detached homes at that point, and the once-hot condo market was cooler than anyone ever would have predicted pre-pandemic. Towards the end of last year, there was no shortage of supply when it came to the city’s most affordable housing type—but there weren’t nearly as many buyers lined up as we’re used to seeing.
Are you thinking of buying a home in the year ahead? Prepare for your next purchase by viewing some of our latest resources.
- Buying a Home in Toronto’s Tight Real Estate Market: a Case Study
- Buying a Bigger Home: Try These 5 Tips for a Smooth Purchase
- 5 Common First-Time Buyer Mistakes to Avoid
How the market looked in 2021
In 2021, we’ve seen many of the market trends from the latter half of the previous year continue. It’s been a seller’s market on the whole, and one that saw record-breaking numbers at that. Detached homes continued to be the hottest commodities, though the condo market eventually became much healthier as buyers began to take advantage of the bargains they found.
In the early months of the year, the supply of detached homes was low and demand for them (especially among first-time buyers) was high. From the beginning of the year through the spring, sales volume grew exponentially. There were more than 70,000 properties sold during this period, representing an unprecedented first half of any year in the Toronto Regional Real Estate Board’s history.
January through March were particularly strong months—in terms of home sales, they broke records. There were 15,652 transactions in March (up 97 per cent year over year) and the average price was $1,136,280 (increasing 21.6 per cent).
Things slowed down slightly in the summer, picking back up in the fall. That said, overall, this unprecedented year will be remembered for its high sales volume and prices—conditions that have strongly favoured sellers.
If you’re preparing to sell your home in 2022, we can help. Start by learning about the process with some of our latest selling resources.
- The Major Costs of Selling a Home
- Home Showings: What Sellers Should Know
- 5 Ways a Real Estate Agent Can Help When You’re Selling a Home
What to expect in 2022
A new year is about to dawn, and buyers and sellers are wondering what the market has in store. While no real estate professional can accurately predict the future, we can make educated guesses.
Currently, it looks like the trend of a strong seller’s market may continue—at least in the immediate future. The real estate sector has adapted well during the pandemic, and we’ve learned a lot about how to conduct business safely. Buyers and sellers also have a better idea of what to expect if we go into lockdown again, and many will feel confident fulfilling their plans even if current conditions change.
One major upcoming shift that buyers should look out for is a change in mortgage affordability. The Bank of Canada will be raising its rates as early as the second quarter. We’re bound to see an increase in mortgage rates as a result, which is worth keeping in mind if you’re planning a purchase.
The Liberal Party has also announced its plans to improve housing affordability. Its platform includes loans and grants for rent-to-own programs, tax-free savings accounts for first-time buyers, and an increase of the insured mortgage cutoff from $1 million to $1.25 million (among other developments). If you plan to buy or sell, you’ll want to stay on top of these potential changes.
Are you wondering how the market will impact your purchase or sale in 2021? We would be happy to help—simply get in touch to take the first step.