So fortune telling may not be our profession but we’ve done the research to find out what the experts are saying about the GTA Housing Market in the new year.

Here are our real estate predictions for 2021. 

With major news articles swinging both high and low in every direction possible, many including the likes of the Globe & Mail, Financial Post, CTV and even the infamous Huffington Post can’t seem to make up their mind.

Articles have been published left and right, that have the market continuing to swing up in double digits while others promise the worst housing market crash in history.

With all things considered regarding the state of the economy, shuttering of businesses and the looming end of CERB + mortgage deferrals is hanging on one side.  While on the other, a government trying to hold it all up with low interest rates, reduced stress tests and promises of heavy immigration to fill in the gaps.

Our feelings are mixed, just as we’re sure yours are, but what we do know is that the year ahead will not be for the faint of heart.

Prediction #1: House Prices Will Continue to Climb.

Much to the dismay of many market crash forecasters, the Canadian Real Estate Association is forecasting optimistically for 2021.

“Current trends and the outlook for housing market fundamentals suggest activity will remain relatively healthy through 2021, with prices either continuing to climb or remaining steady in all regions”  – CREA, Dec 2020

Comparing provinces to provinces when looking at sale prices, not too surprisingly, Ontario comes out on top.  Residents of Ontario as a whole are predicted to spend 16.3% more on a home in 2021 than in 2020.  

A notable attribute alluding to such predictions is sales volume which is predicted to decline in Ontario by -3.3%.

Overall, less inventory on the market means more competition which will continue to fuel the apparent never-ending sellers market we’ve come to see over the last few months.

Prediction #2: Interest Rates will Remain Low. If the Government of Canada has anything to say about it, our economy will be padded with as many benefits as possible to lure off economic catastrophe. Sky high interest rates would mean the worst for many home owners and as such, the Government will do its best to keep it all in stride. 2020 was the year of the lowest mortgage rates in recent history and with that the Bank of Canada has committed to keeping interest rates low through 2023. That wasn’t the Bank of Canada’s only action this year however. In recent years, an obstacle added to Buyers known as The Mortgage Stress Test was put into place to ensure Buyers wouldn’t be over leveraged.  In more detail, the test is used by the Big Banks to qualify applicants at a benchmark 5 year rate instead of the current day one.  Thanks to the Bank of Canada, the Mortgage Stress Test benchmark has also been reduced for 2021 and beyond. With these two notables in place, it really couldn’t be a better time to use leverage to your advantage.  (Dare we say – thank you Government?!) Prediction #3: Condo Market will Rebound. The year behind us was most certainly not the year for most and Downtown Toronto condos would raise their hands sky high to attest to that. A mass exodus from the 416 during the pandemic sent many condo dwellers looking to greener pastures in the 905.  Why live in a bustling city condo when there is no bustle?  Working from home meant that home really could be just about anywhere. Couple that with the strict AirBnb restrictions rolled out by the city, and investors too began to sell and flee in droves. The result?  A condo market down -9% from its peak in early 2020. All being said though, there are many that bet a return to the city is in sight.  Pre-construction condo development roars on, with many 2020 developments being sold out in days.  Builders & Developers alike predict a return to offices once the work from home realities and isolation fatigue are done with.  Many big projects that were paused in 2020 are set to rollover into 2021. Let’s also just shout out Toronto a little .. Toronto was ranked as the fastest growing city in all North America in 2019 – beating out the likes of many big US cities.  Toronto was also ranked the 13th best place to live IN THE WORLD for 2021.   Do we really believe the dwellings of our world class city will crumble at our feet without an eventual triumphant return? “Economic growth, fuelled by immigration and global investment, have Canada’s largest city poised for big things.” – Resonance Consultancy, July 2020 Potential investors take note! Don’t miss an opportunity to take advantage of the falling prices while they’re still falling.  Our bets are on a rebound by the end of the year.