WILD: Low supply, high demand wreak havoc on Toronto real estate market – Toronto Sun

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When the global pandemic hit a year ago, working remotely became the new normal for many.

Instead of starting the day stuck in traffic, the new nine-to-five starts with video meetings with a cast of dogs, kids and bad hair in the background.

And while companies counted lower office space costs as one rationale to embrace the growing work-from-home culture, better work-life balance — especially for working moms — has been a life-changing benefit for employees.

It has also had a growing impact on Ontario’s real estate market.

Although the migration of people from cities — especially Toronto and particularly retirees — has been a trend for several years, the COVID-19 virus has given many working families pause for thought when it comes to commuting, traffic and city living.

House prices in communities like Hamilton and Barrie for example, have become red hot throughout the pandemic.

However, while COVID has also fuelled the migration of buyers from the downtown core to the suburbs and beyond, it’s also playing havoc with market supply.

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Many sellers are hunkering down in place — waiting to see what COVID brings — and as a consequence resale housing supplies have been constrained, which in turn fuels rising prices.

New home construction has also been impacted by COVID, from delays in the municipal building approval processes and approvals to labour, workplace safety and other hurdles for builders who now must deal with social distancing and other measures in workplaces.

All of this adds up to tight supply.

And looking at February’s numbers, the story is absolutely about low supply and continued strong demand from buyers.

The Toronto Regional Real Estate Board (TRREB) reported GTA sales of 10,970 in February 2021, up 52.5% compared over the previous February.

There were 15,137 homes listed in the GTA this February, up 42.6% from last year, while the average selling price hit a record-breaking $1,045,488, a gain of 14.9% compared to the same period last year.

The condominium market was particularly hot in the GTA — with a 64% sales increase compared to last year.

March’s numbers will be out shortly and will almost certainly confirm the trend.

TRREB President Lisa Patel suggested in a recent news release that supply issues will continue to dog the market even post-COVID.

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“It’s clear that the historic demand for housing experienced in the second half of last year has carried forward into the first quarter of this year with some similar themes, including the continued popularity of suburban lowrise properties,” she said. “It’s also evident that the supply of listings is not keeping up with demand, which could present an even larger problem once population growth picks up following widespread vaccinations later this year and into 2022.”

The ongoing COVID vaccine rollout will clearly play a role in market behaviour as millions get a vaccine in April and throughout the spring and summer.

But all levels of government will need to look at measures to encourage new and diverse construction of a range of housing.

“Once the economy opens further and immigration into the GTA resumes, there will be an even greater need for housing supply. Understandably, COVID-19 has been front and centre for policymakers,” TRREB CEO John DiMichele said in the recent news release.

With Ontario’s real estate market showing no immediate signs of cooling down, working from home (but not necessarily close to work) is an increasingly important consideration for many buyers and sellers.

The hot market, like COVID, won’t be with us forever but meanwhile, patience, research and preparation are the new golden rules.

Penelope Wild is the former Homes Editor of the Toronto Sun and a realtor with Keller Williams Real Estate Associates.