What Do Rising Toronto Home Prices Mean for the GTA Markets in 2021? Michelle Kam Explains

The GTA housing market is trending upwards against the odds. But what does that mean for the outlying markets and can you still afford to buy a home in the city?

It’s no secret that many people have been choosing to buy in the 905 areas around Toronto in recent past, as 416 Toronto home prices continued to increase to record highs in 2020, says Michelle Kam, a Toronto, Ontario real estate broker. In fact, a recent report says that Oakville is leading the way in the Greater Toronto Area real estate market with average prices of more than $1.3 million

Whitby and Burlington are also ranking highly in terms of sales-to-new-listings ratio, which shows how competitive a real estate market is. Of 35 markets looked at, Toronto was actually the least competitive of the bunch currently. But don’t expect it to be like this for too long. 

Detached 905 Properties Becoming More Scarce

The demand for properties outside the urban area of Toronto is leading to a sharp pricing rise in the GTA markets as inventory for single-family homes starts to dry up. 

The overall number of single-family homes available in the province of Ontario is expected to dip in 2021 — about 3% from the previous year. At the same time, the average price increases in the province are expected to jump more than 16%. 

However, don’t be discouraged if you’ve been planning to buy a unit in Toronto’s urban boundaries, says Michelle Kam. While single home units are in higher demand outside of the city, the average price in Toronto (for all property types) dropped from record levels near the end of 2020 — and condos are almost a steal right now, relatively speaking.

Seller's Market Expected in Most of GTA

This is driven by a cooling off of the condo market, meaning downtown units are remaining stable or dropping slightly in price. This creates a prime opportunity for those wanting to live in the heart of the city or make an investment in 2021. Even detached homes in some Toronto markets cooled off towards the end of 2020 (while still up overall from the previous year). 

Because of the overall demand in GTA markets and limited supply, it will be a seller’s market in most of the areas across the region in 2021, notes Michelle Kam. That’s good news of course if you have a property you’re looking to unload. However, Toronto is flirting with becoming a buyer’s market, which is historically quite rare. It presents a big opportunity for those looking to get their foot in the door. A buyer’s market allows for more negotiation, depending on how urgently property owners want to sell. 

As far as GTA properties go, don’t wait on the sidelines for them to fall even further before deciding to make a move, warns Michelle Kam. If history is any indicator, it won’t be like this for long. Get in on the action while you still can, she advises.