Current MLS stats indicate an average house in GTA hit a new record in 2020 & priced of almost
$930,000 | 4,000 new listings in GTA as of a current trend
TORONTO, Feb. 11, 2021 (GLOBE NEWSWIRE) — The Canadian real estate market prices aren’t just fast growing by local standards. They’re growing fast by any given standard determined by any other country. This is mostly because of the influx of immigrants and the saturation of the big cities. Home sales recorded over Canadian MLS Systems did scale up by 12.6% with a total number reaching to 500,000 for year 2020, a new annual record. This has been the new world record set in amidst the pandemic.
The actual (not seasonally adjusted) national average home price was a record $607,280 in December 2020 and was up 17.1% from the same month last year. The new year brought us fewer than $100,000 residential listings on all Canadian MLS Systems, the lowest ever based on records going back three decades. This compared that to five years ago when there were a quarter of a million listings available for sale. Most definitely there is a high demand and low supply to the start of the year. This will only play out when we know the sales and price data as they populate this quarter of how many homes are available to buy in the months ahead. There was only 2.1 months of inventory on a national basis at the end of December 2020 – the lowest reading on record for this measure. At the local market level, 29 markets in Ontario were under one month of inventory at the end of December.
Interesting highlights from 2020 real estate industry include:
- 95,000+ sales were reported through TREB’s MLS® System – up by 8.4 per cent compared to 2019. This included the month of December, with 7,180 sales – a year-over-year increase of 64.5 per cent.
- Year-over-year sales growth was strongest in the GTA regions surrounding Toronto, particularly for single-family home types.
- The average selling price reached a new record of $929,699 – up by 13.5 per cent compared to 2019. This included an average price of $900,000 in December – a year-over-year increase of 11.2 per cent. The strongest average price growth was experienced for single-family home types in the suburban regions of the GTA.
- After a pronounced dip in market activity between mid-March and the end of May, market conditions improved dramatically in the second half of the year, with multiple consecutive months of record sales and average selling prices.
Save Max has predicted, the gap between the supply and demand fuelled with record low interest rates in the Toronto Market would lead to a strong price growth and sales in the year 2021. Prices are projected to increase another 10% by August of this year. This is all based on current demand and the spring economic recovery. Canada’s third quarter GDP growth was 40%. Since there are promises made by the US to renew free trade which should are considered to be positive for Canada and Ontario/GTA exports. This in-turn will benefit businesses and create opportunities for which real estate is essential. The lack of supply of homes is making it difficult to find a home in GTA. At the moment, people are moving to cities such as Vaughan, Bradford, Newmarket, Aurora, Milton, Stouffville, Pickering and Whitby to gain affordable and profitable properties for the long run. In the long run, there may be a drop in prices by an average of 20% basis the market style, the industry is currently portraying. Fundamentals of housing cannot really make a concrete evaluation as the human market demand is an emotional call.
As far as Peel region is concerned, the average detached house price rose 42% in the 416 districts to an astonishing media of $1,475,758. Houses rose 58.5% in the 905-area code to a high of $1,175,753. This trend is expected to continue and in peel region where in shortage of supply combined with historically low interest rates will push the cash rich buyer to look for bigger properties. The resumption of the immigration will increase the ever-growing demand for the house. Brampton & Mississauga market will have prices that are expected to grow in double digit and demand is going to be more than the supply.
Factors that will influence 2021’s real estate market:
- More demand than the in-stocked inventory of Houses especially in GTA
- Changing demand for commercial spaces because companies are implementing Work From Home practices.
- Investment and development strategies in real estate are now emerging as key investment strategies more so right now
- Sparing home spaces now to gain in extra inflow of income has also become a huge aspect of housing and real estate as there is going to be an influx of immigrants into the country very soon.
About Save Max Group of Companies:
Save Max Real Estate is one of the fastest growing brokerages and opened its first real estate office in Brampton in 2010. From making history in the field of real estate by achieving $100 million sales volume within 16 months of inception to achieving $4.8 billion sales volume and 9000 transactions until today, Save Max has always strived to stay true to its beliefs to deliver an exceptional real estate experience to all its valued clients.
The City of Brampton is home to Save Max and the company has had the opportunity to serve the residents and provide incomparable real estate services for past years and will keep doing the same in the future. Save Max is expanding and operating with 36 Franchisees all across Canada today.
What Is the Canada Mortgage and Housing Corporation (CMHC)
The Canada Mortgage and Housing Corporation (CMHC) is a Canadian Crown Corporation that serves as the national housing agency of Canada and provides mortgage loans to prospective buyers, particularly those in need.
Understanding the Canada Mortgage and Housing Corporation (CMHC)
The Canada Mortgage and Housing Corporation (CMHC) serves as the national housing agency of Canada. CMHC is a state-owned enterprise, or a Crown corporation, that provides a range of services for home buyers, the government, and the housing industry.
CMHC’s stated mission is to “promote housing affordability and choice; to facilitate access to, and competition and efficiency in the provision of, housing finance; to protect the availability of adequate funding for housing, and generally to contribute to the well-being of the housing sector.”1
A primary focus of CMHC is to provide federal funding for Canadian housing programs, particularly to buyers with demonstrated needs. CMHC, headquartered in Ottawa, provides many additional services to renters and home buyers, including mortgage insurance and financial assistance programs. CMHC acts as an information hub for consumers, providing information on renting, financial planning, home buying, and mortgage management.
CMHC also provides mortgage loan insurance for public and private housing organizations and facilitates affordable, accessible, and adaptable housing in Canada.2 Additionally, CMHC provides financial assistance and housing programs to First Nations and Indigenous communities in Canada.3
Professionals and Consumers
CMHC provides services to both professionals and consumers. For professionals, CMHC aims to work in collaboration with different groups to provide affordable housing. Services include project funding and mortgage financing, providing information to understand Canada’s housing market, innovation and leadership networks to access funding and talent to spur housing innovation and increase supply, and providing speakers and hosting events for the industry.4
For consumers, CMHC seeks to provide all the tools an individual would need to either buy a home or rent a home and a variety of information and assistance for current homeowners, such as managing a mortgage, services for seniors to age in place, and financial hardship assistance.56
For financial hardship and mortgage assistance, CMHC provides tools that include payment deferrals, extending the repayment period, adding missed payments to the mortgage balance, moving from a variable-rate to a fixed-rate mortgage, and other special payment arrangements.7
Canada Mortgage and Housing Corporation (CMHC) and the National Housing Strategy
In November 2017, the Canadian government announced the National Housing Strategy.8 Rooted in the idea that housing is a human right, this 10-year, $70 billion project will largely be administered by CMHC, although some services and deliverables will be provided by third-party contractors and other Canadian federal agencies.9
Strategic initiatives of the National Housing Strategy include:
- Building new affordable housing and renewing existing affordable housing stock
- Providing technical assistance, tools, and resources to build capacity in the community housing sector and funds to support local organizations
- Supporting research, capacity-building, excellence, and innovation in housing research10
History of the Canada Mortgage and Housing Corporation (CMHC)
CMHC was established in 1946 as the Central Mortgage and Housing Corporation by the federal government in Canada with the primary mission of administering the National Housing Act and the Home Improvement Loans Guarantee Act and facilitating discounts to mortgage companies. Initially, CMHC began by providing housing to returning Canadian war veterans, and toward the end of the 1940s, CMHC began to administer a program providing low-income housing across Canada.11
In 1947, CMHC was responsible for opening Regent Park, a large low-income housing project, and Toronto’s first urban renewal project. By the 1960s, CMHC introduced co-op housing and multi-unit apartment buildings throughout Canada.11
In 1979, the Central Mortgage and Housing Corporation changed its name to the Canada Mortgage and Housing Corporation
Canadian home price gains accelerate again in May
Canadian home prices accelerated again in May from the previous month, posting the largest monthly rise in the history of the Teranet-National Bank Composite House Price Index, data showed on Thursday.
The index, which tracks repeat sales of single-family homes in 11 major Canadian markets, rose 2.8% on the month in May, led by strong month-over-month gains in the Ottawa-Gatineau capital region, in Halifax, Nova Scotia, and in Hamilton, Ontario.
“It was a third consecutive month in which all 11 markets of the composite index were up from the month before,” said Daren King, an economist at National Bank of Canada, in a note.
On an annual basis, the Teranet index was up 13.7% from a year earlier, the 10th consecutive acceleration and the strongest 12-month gain since July 2017.
Halifax led the year-over-year gains, up 29.9%, followed by Hamilton at 25.5% and Ottawa-Gatineau at 22.8%.
Housing price gains in smaller cities outside Toronto and its immediate suburbs again outpaced the major urban centers, with Barrie, Ontario leading the pack, up 31.4%.
On a month-over-month basis, prices rose 4.9% in Ottawa-Gatineau, 4.3% in Halifax and 3.7% in Hamilton.
The Teranet index measures price gains based on the change between the two most recent sales of properties that have been sold at least twice.
Canada‘s average home selling price, meanwhile, fell 1.1% in May from April, Canadian Real Estate Association data showed on Tuesday, but jumped 38.4% from May 2020.
(Reporting by Julie Gordon in Ottawa; Editing by Christopher Cushing)
Bank of Canada seeing signs of cooling in hot housing market
The sector surged in late 2020 and early 2021, with home prices escalating sharply amid investor activity and fear of missing out. The national average selling price fell 1.1% in May from April but was still up 38.4% from May 2020.
“You are starting to see some early signs of some slowing in the housing market. We are expecting supply to improve and demand to slow down, so we are expecting the housing market to come into better balance,” Macklem said.
“But we do think it is going to take some time and it is something that we are watching closely,” he told the Canadian Senate’s banking committee.
Macklem reiterated that the central bank saw evidence people were buying houses with a view to selling them for a profit and said recent price jumps were not sustainable.
“Interest rates are unusually low, which means eventually there’s more scope for them to go up,” he said.
Last year, the central bank slashed its key interest rate to a record-low 0.25% and Macklem reiterated it would stay there at least until economic slack had been fully absorbed, which should be some time in the second half of 2022.
“The economic recovery is making good progress … (but) a complete recovery will still take some time. The third wave of the virus has been a setback,” he said.
The bank has seen some choppiness in growth in the second quarter of 2021 following a sharp economic recovery from the COVID-19 pandemic at the start of the year, he added.
(Reporting by David Ljunggren and Julie Gordon; Editing by Peter Cooney and Richard Pullin)