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Toronto's real estate market broke new records this month as home sales increased by 95% year-over-year to 15,652. Despite breaking $1 million only a month ago, average sold prices are now almost at $1.1 million. Decreasing housing inventory, increasing mortgage rates, and the (temporary) relaxation of lock downs have fueled incredible demand for properties in the GTA.
Notice: Year-over-year comparisons for March and the next two months will be exaggerated by the temporary downturn from the outbreak of COVID-19 in March 2020.
Average sold prices reached $1.09 million this March, a 22% increase year-over-year. This growth in prices has been mainly isolated to surburban and freehold properties. Prices of detached and semi-detached homes reached $1.4 million and $1.04 million, respectively, a growth of 27% and 18% compared to March 2020. Townhouse prices, just barely under the $1M limit for CMHC insurance, have grown by 32% year-over-year to $951K as buyers compete for the few remaining properties on the market. In contrast, prices for condo apartments have barely increased over the past year with a 3% increase (even considering the temporary COVID-19 downturn) to $676K.
In terms of home sales, buying activity has broken new records as home buyers look to lock down properties before mortgage rates increase. Sales of detached homes and semi-detached homes increased by 102% and 97% year-over-year, respectively. Sales of condos are also almost double last year levels with a 90% increase from March. 2020. While current activity is extremely high, we caution against taking these figures at face-value due to the initial impacts of COVID-19 during March 2020.
A better measure of housing demand is housing inventory. Homes continue to be scarce across the GTA, driving prices higher as buyers compete for a limited number of sellers. With strong promises of stimulus from the Liberal government, including a revamped First-Time Home Buyer program and direct handout programs and promises of a continued low-interest environment by the Bank of Canada, there are significant tailwinds for the future of the GTA real estate market.
The dual-edged sword of rising mortgage rates has also created a new dynamic in Toronto's housing market. In the short-term, buyers are rushing to purchase and lock down their mortgages before mortgage rates rise any further. In the long-term, higher mortgage rates will decrease the purchasing power of available buyers.
Ontario is home to the largest number of real estate agents in Canada: the Toronto Regional Real Estate Board (TRREB) alone represents over 56,000 agents, or more than 40% of the total agents in Canada represented by the Canadian Real Estate Association (CREA).
Toronto has been experiencing explosive growth in recent years in both its population and housing market. This population growth is not evenly distributed throughout the city of Toronto, however, with a significant portion concentrated south of Bloor in the downtown area, especially in the Waterfront communities, as well as the neighbourhoods west of the Downtown.
Total transactions for calendar year 2019 amounted to 87,825 as reported through TRREB's MLS® System by Greater Toronto Area REALTORS®, with the number of total new listings reaching 150,000 over the year or on average over 10,000 a month. Based on the latest Toronto housing report, the average selling price for residential properties hovers just over $800,000; more specifically: $1,016,776 for detached properties, $814,424 for semi-detached properties, $659,990 for townhouses, and $587,959 for condominiums or apartments. For commercial properties,around 1,000 are sold each year and just under 25 million square feet of leased commercial property space.
Regarding real estate commissions in Toronto, the average combined real estate agent commission is between 3.5% to 5% of the total selling price. Real estate commissions are split between the buyer’s and seller’s agents. Higher commissions are possible, but the standard rate is 5%.
Within the GTA, a recent survey conducted by TRREB revealed that 11% of Toronto residents indicated that they were extremely likely to purchase a home over the next year and 49% of recent home buyers were first-time home buyers. The most popular home type for intending buyers was the detached house which made up 46% of all residential property sales in 2019.
The second most popular home type was the condominium or apartment, which made up 27% of all residential property sales in 2019. Toronto has 2,326 high-rise buildings - a large number that reflects factors including population density and public transportation . In 2019, the condominium apartment market segment experienced the most dramatic year-over-year price growth with a 6.4% price increase from 2018, but prices are still more affordable compared to other property types especially for first-time home buyers.
With the plethora of choices on the market and the number of agents available, we understand that buying or selling a property can be overwhelming. Choosing the right agent is one of the most important decisions you will make, and that is why we are here to help. We have accumulated some of the best agents in Toronto and developed honest and transparent profiles to make your decision-making easy and convenient—contact any of them straight through the website and secure your own real estate journey today.
Real estate commissions are the fees that home sellers pay to the seller and buyer real estate agents for their services. In Toronto, the total commission rate is set anywhere from 3.5% to 5%. Seller agents usually get 1% to 2.5% of the total commission with the buyer agents getting 2.5%. You can use our calculator provided below to calculate your real estate commission estimate for Toronto. For other cities in Ontario, please visit our Ontario real estate commission calculator page for more information.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA.