New Beginnings…Old Habits
Writer and philosopher George Santayana said, “Those who cannot remember the past are condemned to repeat it.” If you want to know why the market has been so active, (prices up 14.3% this past year) and what is going to happen to Toronto real estate, let’s look at the recent past.
For the last several years Toronto has experienced a severe housing shortage as immigration into the GTA occurred in unprecedented numbers. Rental rates and home prices increased drastically as demand continued to outpace supply. Government red tape restrictions have not allowed the builders to keep pace with demand, and the advent of Airbnb took thousands of units out of the rental pool, exacerbating shortages.
That came to a head at the start of 2020 with rental prices increasing by as much as 30%. As Covid 19 emerged, the market slowed as people took a wait and see attitude.
Within a short time we realized:
- We could remain safe with proper protocols.
- There were economic challenges for some business sectors, but for many it was business better than normal.
- Ultra-low mortgage rates brought more buyers into the market.
- Government spending helped the economy.
All in all, during the Summer and into the Fall of 2020 we felt “ life” could continue during Covid and that meant that real estate continued its aggressive upward trajectory.Certain categories like Single family homes became even more desirable.
Factors that will continue to be present in 2021; Low mortgage rates. A strong economy. The beginning of the end of Covid 19. Government policies to increase immigration to Canada. Airbnb returning and thousands of rental units removed from rental pool.
It seems obvious what will happen as we return to being the vibrant and desirable city we were before the pandemic…you just have to look back and see!
This is the time to review your real estate portfolio, contact me, let’s talk and plan for you and your family’s real estate future.
Have a great January.