2021 Toronto Real Estate market predictions – something a lot of clients and those watching the market are thinking about as we enter the final two months of the year.
If 2020 has proven anything, it’s that no one has a crystal ball. Who could have ever predicted a global pandemic that nearly halted the entire planet?! But who else could have predicted that the Toronto market would not just survive, but thrive during these crazy months?!
It’s an interesting time in the Toronto real estate market right now and 2021 will be a year to watch. What will happen with condos, homes and pre-construction? We’ve put together our insights below for each segment after research, conversations with colleagues, buyers, sellers and investors, and well, our gut feeling based on our 10+ years in the industry.
The theme for 2021? BUYING BUYING BUYING.
Toronto Condo Market in 2021
We wanted to start with the Toronto condo market and what it’s going to look at in 2021 because right now, there are so many headlines about its uncertainty.
The one thing we’re absolutely certain about? Buying condos. Why am I so certain about the comeback of the condo market and not the “bubble burst” as so many thought-leaders have been talking about for as long as we can remember?
Because when you look at a city like Toronto, with SO many office towers, buildings, shared working spaces, and is a hub for the financial heartbeat of Canada, does one really think the downtown core is going to be empty and vacant? BMO tower unoccupied, Scotia Plaza empty and the countless other homes to Canada’s top business without action, activity and PEOPLE? The answer is simply, no.
Early in 2021 we predict an influx of condos hitting the market. There is no denying the fact that it might be a while before Airbnb takes off again with travellers visiting the city. There are no business travellers and no tourists filling up these suites, and that’s going to remain the case for at least the first quarter of the new year.
Investors who have bought condos to use specifically for Airbnb likely didn’t have a year vacancy built into their purchase analysis and are going to be feeling the pinch.
What does this mean? It’s time to buy because there is going to be so much competition it will create a buyers’ market with lower prices.
BUT – buyer beware – as always when picking up real estate. Can you purchase a condo below market value, hold it empty for six months and ride out this storm? There will be lucrative opportunities to be had in the market but you’re going to need to plan accordingly and have the right analysis in place.
The fear of a suite sitting empty might have you rethinking this – should you just get a tenant at a low rent just to have someone in the suite paying you money? Maybe, but why not hold out until the downtown core makes a comeback, securing you more rent than you would have had before the pandemic?
It’s a risky strategy but I’m willing to bet it’s going to pay off. People will always want to live close to where they work – it’s undeniable. Sure, we’re working from home now, but what happens when the mass exodus returns? You’ll be in a winning position – do doubt.
Assignment Sales in 2021
The Globe & Mail does a great job of getting us to click on their headlines, don’t they? The most recent that made us stop and look (just like everyone else) was something along the lines of Investors rushing to get out of their prebuilt condo deals.
Sure, there are some pre-con buyers who are looking to sell on Assignment, but that’s always the case. It’s a proven strategy to make money in a strong market.
But with a number of Assignments hitting the market, now is the time to buy. But not all assignment sales are good ones, and we’ve seen both sides of this coin recently. There will be some great opportunities to purchase new build condos for well under market value.
Not only is this smart for investors, it’s actually even better for end users. You’ll be getting a brand-new condo, without any wear-and-tear that you can move into soon, for less than resale.
Where are these deals? They’re not offered to the masses so work with a broker that can sift through the crap and find the ones that matter for your strategy – be it living or investing.
Toronto Detached & Semi-Detached Homes in 2021
No one can deny the housing market, in all parts of the city has been on fire during all of 2020. From those looking to relocate from smaller condos to larger homes in the city, to those looking to move outside of the city for more space, there is movement in the market at all price ranges and within all neighbourhoods.
Pricing has spiked in 2020 and whether that is the result of a rushed, panicked market, literal demand for semis and detached homes, or a mix of the two, we feel 2021 may provide a bit more stability.
Buyers are in the position where they don’t want to be rushed with any decisions. There is decision-fatigue in every aspect of our lives right now – from sending kids to school or not, to traveling to where to live.
Pressure isn’t something anyone wants, and that’s particularly true when it comes to making a big move in 2021. The spring market will likely bring a number of listings to MLS as it traditionally does, but I don’t think the “hurry-up and buy” attitude is going to be there among buyers.
Those looking to sell in the spring market should get their homes in order early and be prepared to sell earlier than they think. Buyers will be eager to get out of their homes looking at potential properties in order to be settled when the spring thaw hits.
Be prepared and do your work early on. We saw that happen right before the Fall market when August was one of the hottest selling periods of the year – traditionally a month that’s pretty quiet. We can expect the same in early 2021.
Toronto Real Estate in 2021: Pre-Construction Condos
Pre-construction condo purchases are going nowhere but up from here, and the current situation indicates 2021 is going to be a good year for pre-construction condos in Toronto and outside of the downtown core.
Pent up demand is here now, so we can only imagine what that’s going to look like in 2021. With major projects like XO 2 Condos, Brightwater, 8 Wellesley coming in the first half of the year, pre-con is set to have a major moment in 2021.
You’re going to see developers stepping up their game for end users, by creating more two- and three-bedroom layouts with outdoor space, making downtown living more appealing to those looking to stay in the core with their families.
Investors are also going to be adding these larger suites to their portfolios as the demand for more space invades the market. These larger suites with terraces and outdoor space will become attractive to all types of buyers.
Pre-construction has never been a bad way into the market and this will hold true in 2021. First time investors will have more options than ever, and these options won’t just be in the downtown core. They’ll be in places like Port Credit where communities are being developed with end users in mind.
2020 surprised us with stability and growth in the Toronto real estate market, and 2021 will be no different. Buyers will be buying and sellers will be selling. It will be critical for both groups to be educated about what’s really happening in the market, in their neighbourhood and on their street. Plenty of opportunities will exist but we can’t forget to expect the unexpected, and be ready to take advantage when the timing is right.
If you’re interested in discussing your 2021 Toronto real estate goals with experts who can sift through the headlines and give you the facts, simply provide your details below – we’ll be in touch right away.
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