While the Toronto, Ontario real estate market is historically strong (and continues to be), there were some 2020 trends that were out of the ordinary for Canada's biggest city, says Michelle Kam, a veteran real estate broker. 

The pandemic caused some major hiccups in the housing market earlier in the year: for example, activity slowed dramatically at the end of March, not long after lockdown measures were introduced. This was short-lived, as the market rebounded quickly and posted double-digit increases in sales growth compared to a year earlier despite the slowdown. Competition has since remained strong and average prices in the 416 and 905 continue to climb despite the economic challenges faced by many. 

However, there are some anomalies that began in 2020 that continue as the market grows. For example, one of the biggest trends was lockdown-weary buyers looking for larger properties in the 905 region. The markets in Toronto's outlying areas are becoming much more competitive, which is driving up prices dramatically in places like Oakville and Hamilton, the latter which saw an almost 10% jump in prices during the pandemic. Durham region east of Toronto also saw a lot of activity, and the increased demand in the area for homes drove prices up about $150,000 on average. 

Activity Across the Board was High, Even During the Holidays 

While many first-time buyers saw 2020 as a great time to buy a property, some found it tougher than expected. The demand for homes outside of Toronto in particular caused intense bidding wars, meaning buyers were scrambling to find a suitable area to land their ideal property after losing out to higher offers. 

Toronto still saw some growth in sales, which is no surprise given the historical demand for properties in the city. In fact, there was also an unusual amount of activity during December when the market usually cools off due to the holiday season, explains Michelle Kam. Reports suggest the number of units sold (and average prices) in December 2020 outpaced the same month a year before by a wide margin. 

However, Toronto's 905 area suburbs actually outpaced the city overall. In fact, reports from November 2020 suggested sales of GTA properties increased by more than 24% compared to a year previous. 

Toronto Condo Market Cooled in 2020, but Poised for Rebound

While detached homes in Toronto continued to rise in price — low double digits inside the city's urban limits — the same cannot be said for the condos in Toronto, says Michelle Kam. 

While average prices for a unit rose in the 905 areas, there was a slowdown with 416 growth in the latter part of the year. However, while many people held off buying a unit amongst the uncertainty of the economy, modest growth is expected for Toronto condo prices, mostly in the latter part of 2021. 

One of the other factors witnessed in 2020 was selling off of condos by investors, who were renting to students or young professionals, notes Michelle Kam. However, as universities are expected to resume usual in-person attendance rates as the vaccine rolls out and immigration ramps up as per national goals, this trend isn't one that's expected to continue for all of 2021. 

Overall, while the condo market slowed down somewhat in the city, it will likely see an uptick — especially since condo buildings are incorporating more features that may be attractive to someone working from their own premises such as conference rooms (not to mention close access to amenities and transit).

What this amounts to, says Michelle Kam, is that it is an ideal time to buy a condo in the city given the expected recovery. Young prospective buyers who have been living at home for the past year and saving money will likely also be looking to put their money into a unit, which means the condo market could shift upwards quickly. 

More Homeowners Put Money into Renovations Last Year

There were other 2020 trends that didn't involve moving or selling. For homeowners who already owned a property, many of them invested in home improvements last year, explains Michelle Kam. 

A large upswing of permits issued for home renovations was seen Ontario-wide — almost 30% over the previous year. The bulk of the renovations were to make homes more suitable as home offices or to add entertainment elements to the backyard (such as a new deck or patio features) as visiting people indoors was restricted. Even backyard pools saw a dramatic increase. 

These weren't small projects as a whole. Michelle Kam cites a report that suggests more than 20% of people doing renovations spent more than $20,000, which was surprising with the economic flavour of 2020. People used money they were otherwise saving for a vacation to invest in their properties. 

Meanwhile, as home values continued to rise in Toronto and the suburbs, more property owners looked at their equity to complete renovations. The upshot is that investing money in home improvements not only made homes more suitable for staying in one place, but also increases their value. In fact, many home improvements dramatically increase the market value of a property — with kitchen and bathroom renos leading the way. Even refreshing the outside of a home increased market values thanks to the power of curb appeal. 

Toronto Housing in 2021 And Beyond Looks Promising, Says Michelle Kam

No matter how you look at it, 2021 looks to be an interesting and potentially challenging year in the Toronto housing market, says Michelle Kam. She expects 416 condos to rebound later this year, while low mortgage rates and high competition is expected to drive prices higher for all housing types. 

While some analysts expect a bit of cooling off for the Ontario housing markets as a whole this year, most of them expect the country's real estate to come out of the pandemic relatively healthy.