It has been a year since COVID-19 changed lives across the globe, including Downtown Toronto. Juggling between the changing restrictions and regulations ever since March 2020, most Downtown Toronto residents were subjected to a complete lifestyle change that mostly revolved around staying at home and keeping a safe distance.
With many people working from home, keeping outside contact to a bare minimum, and non-essential businesses closed, Downtown Toronto life slowed down, painting a very different picture of the usually vibrant and full-of-life Downtown Toronto lifestyle. However, all of that did not stop the Toronto real estate market, which, more or less, made a full recovery by the end of the year after the initial lockdown in March. The number of home sales spiked, and the average price for most home types increased, with the exception of condos which are now seeing a very active market.
Looking at the Downtown condo market, we can see that the current market favoured condo buyers, which is a rare occasion in the Toronto market. If you were or are thinking about buying a Downtown Toronto condo, be it for yourself or as an investment property, the timing could not be better and here is why:
Condo buyers can benefit from the current Toronto market
Low Mortgage Rates - Record low borrowing costs are contributing to the great opportunity for Toronto condo buyers to lock in low interest rates and find their dream condo in the Downtown area before prices go up again, as predicted for 2021. (Click here to explore Toronto condo listings).
Back to Work will shift Demand - Real estate across Ontario saw a real jump in price as homes outside the Greater Toronto area became high in demand. The work from home environment pushed people further from the city seeking more space at lower cost levels. Since there was no need to travel to work, many people were quick to make the move further away from the core. This decision may have been more short sighted as we now see businesses are now stepping away from the work from home model and gearing up for a back to work environment post pandemic and these travel times will add to the strain of many downtown Toronto workforce. The rapid increase in prices outside the city have now grown to levels that no longer provide more value or space to live outside the city and the demand for buying housing within the GTA will again increase.
Rise in Inflation - Central Banks and governments have funnelled record amounts of money into their economies to fight global recession triggered by the pandemic. To offset this, inflation is expected to rise especially on big ticket items such as real estate. Some may argue that the effects of inflation have already taken place with the rise in home prices however since the surge has not been spread equally, certain markets and areas like the downtown core still have opportunity for home buyers.
Demand and Need for Condos is Coming - The pandemic halted immigration to Canada and the flow of international students looking for housing which caused the demand for condos to decrease for the first time in decades. Added with the loss of tourism and airbnbs, the supply of investment properties and short-term rentals further affected supply and condo prices allowing buyers on the sidelines the opportunity they have been waiting for. Once Immigration and Universities open back up, the need for housing will once again be high in demand driving prices higher.
Canadians Returning from Hong Kong - There is another factor to consider that a major shift is coming. It is estimated that there are more than 300,000 Canadians currently residing in Hong Kong. Chinese authorities have begun enforcing a decade old law that denies dual citizenship forcing residents to choose between residing in China and Canada. There is a strong likelihood that a large percentage of these Canadians will return to Canada and seek permanent housing mainly in the areas of Toronto and Vancouver.
Demand for Downtown Toronto properties is expected to further increase with the vaccines
With vaccines hopefully rolling out soon, the desire to return to normal life is stronger than ever. Businesses in the downtown core especially large corporations realize that the work from home model isn’t as productive as they had hoped. Employees also lack the interactions and socializes of the work environment and are eager to return to the workplace. We are so fortunate that Downtown Toronto has so much to offer Torontonians to live life to the fullest with world renowned museums, top level restaurants in every genre of cuisine, bars, concerts, festivals, sporting events, parks, universities and more. Such activities will boost local businesses and the economy, highlighting again Downtown Toronto living in its full glory and the place we love to call home.
Even though activity in the condo market remained relatively moderate throughout 2020 without major growth, things have started to take a turn at the end of 2020. Condo sales began to pick up rapidly in December, accounting for a 75% increase year-over-year and the spring market has begun early in 2021 . This should not come as a surprise, since condo buyers recognized the favorable market conditions and are trying to get in on the market at slightly more affordable prices while they can.
For detailed information on available listings, the market conditions, and assistance with a condo purchase, contact Reza Afshar here.