Toronto single-family homes see double-digit price gains in city centres, while buyers trade location for square footage
According to the Royal LePage House Price Survey released today, the aggregate1 price of a home in Canada increased 9.7 per cent year-over-year to $708,842 in the fourth quarter of 2020, as strong seller's market conditions continued to shape Canada's real estate market through the end of the year. The significant year-over-year increase in aggregate price was driven by price gains for larger properties. Sixty-four per cent of all regions surveyed showed year-over-year median price gains of more than 10 per cent for two-storey homes.
The Royal LePage National House Price Composite is compiled from proprietary property data, nationally and in 62 of the nation's largest real estate markets. When broken out by housing type, the median price of a standard two-storey home rose 11.2 per cent year-over-year to $840,628, while the median price of a bungalow increased 10.0 per cent to $592,899. The median price of a condominium increased 3.9 per cent year-over-year to $509,239. Price data, which includes both resale and new build, is provided by Royal LePage's sister company RPS Real Property Solutions, a leading Canadian real estate valuation company.
"In April 2020, we issued our pandemic period forecast for Canadian real estate, the principle prediction being that unexpectedly soft spring home prices, historically low interest rates, and years of pent-up demand would trigger a sharp recovery of sales volumes and rising property prices in the second half of the year," said Phil Soper, president and CEO of Royal LePage. "As we close the books on the strangest year in my long career, 'recovery' proved to be an understatement. Looking at fourth quarter results we can state without hyperbole that the health crisis triggered a real estate boom.
"High levels of unresolved housing demand and low inventory levels will likely characterize the 2021 spring market, putting further upward pressure on housing values, particularly in the detached and larger townhome segments, as families with access to extremely low borrowing costs trade traditionally desirable urban locations for more personal space," he continued.
Nationally, Ontario posted the highest year-over-year aggregate home price gains in dollar value during the fourth quarter. During this period, the aggregate price of a home in Markham increased $133,932 to $1,100,436, the highest dollar value increase in aggregate home price. Markham was followed by Vaughan, which increased by $132,699 to $1,130,483; Burlington, which increased by $115,475 to $950,796; Pickering, which increased by $110,905 to $856,725; and, Oakville, which increased by $109,912 to $1,215,405.
"Confined to their homes, Canadians are struggling to adapt their properties to accommodate the need for an office, school classroom and gym, and find themselves longing for more living space," said Soper. "Yet buying a house is not like buying a car; for most it is a long-term commitment. Post-crisis, some employers will be accommodating of work-from-home employee requests, and some businesses will require that their teams work together in offices again. Many will adopt a hybrid model. Home shoppers should look at prospective neighbourhoods through a post-pandemic eye, paying careful attention to the things that will matter when we drop our masks, including restaurants, access to entertainment and even walkability."
Soper added that the surge in sales that characterized the second half of the year is a sign that Canadians feel confident buying and selling properties during the pandemic.
"The real estate industry has shown that buying and selling property can be done safely as much of the search and purchase process can now be done online," he said. "Our real estate agents can help families looking for a home with efficient digital showings. Physical private viewings of a short-listed property should be done in compliance with best practice and public health guidelines. Clients can use their phone or computer to complete the transaction, leveraging today's advanced technologies."
While many Canadians have been seeking larger homes outside of urban centres, demand for properties in Canada's largest urban centres have remained high. Ottawa's aggregate price increased 14.9 per cent year-over-year to $568,608 during the fourth quarter, the greater regions of Montreal, Toronto and Vancouver increased 12.4 per cent, 10.4 per cent and 7.2 per cent to $487,380, $936,510 and $1,155,346, respectively.
Strong demand in the fourth quarter also resulted in price stability in Canada's energy and agriculture regions. During the period, the aggregate home price in Saskatoon, Regina and St. John's increased year-over-year by 6.3 per cent, 3.4 per cent and 0.8 per cent to $400,173, $327,517 and $325,833, respectively. Edmonton and Calgary's aggregate home prices remained relatively stable, dipping 0.1 per cent and 0.5 per cent to $372,515 and $467,041, respectively.
Demand from local buyers and those relocating back to the Maritimes put significant upward pressure on prices. During the quarter, Halifax posted the highest increase in aggregate price, rising 17.1 per cent year-over-year to $377,469. Charlottetown posted the second highest increase in aggregate price rising 12.7 per cent year-over-year to $344,823, during the same period.
In December 2020, Royal LePage issued its 2021 forecast stating that the national aggregate price of a home is expected to increase 5.5 per cent year-over-year. To read more about Royal LePage's national and major urban centre forecast, please go to rlp.ca/2021-forecast.
Greater Toronto Area
The aggregate price of a home in the Greater Toronto Area (GTA) increased 10.4 per cent year-over-year to $936,510 in the fourth quarter of 2020. Broken out by housing type, the median price of a standard two-storey home increased 11.9 per cent year-over-year to $1,102,155 in the fourth quarter, and the median price of a bungalow rose 12.8 per cent year-over-year to $923,047. During the same period, condominiums in the region continued to see healthy price appreciation, with the median price rising 3.6 per cent year-over-year to $593,811.
With the exception of condominiums, similar strong home price gains were seen in the City of Toronto where the aggregate price of a home rose 7.4 per cent year-over-year to $960,368 in the fourth quarter. Broken out by housing type, the median price of a standard two-storey home increased 10.6 per cent year-over-year to $1,446,184, and the median price of a bungalow rose 12.3 per cent year-over-year to $1,001,083. During the same period, the median price of a condominium grew 1.4 per cent year-over-year to $634,081.
"Throughout the second half of 2020, buyers were looking for as much space as they could afford. While many buyers shifted their target neighbourhood away from the city centre, so few properties for sale meant that most detached listings saw multiple-offer scenarios," said Debra Harris, vice president, Royal LePage Real Estate Services Ltd. "2020 did bring some balance to the region's condominium market but larger units, often in the greater region, are still in high competition."
Harris added that pent-up demand in the GTA remains significant for detached homes and inventory levels will be a leading indicator of price appreciation in the spring market.
"The GTA real estate market could absorb a short-term influx of detached home listings and remain in a seller's market. If inventory remains low, prices can only go up," said Harris.
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in the Greater Toronto Area will increase 5.75 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.
The aggregate price of a home in Ottawa increased 14.9 per cent year-over-year to $568,608 in the fourth quarter of 2020. During the same period, the median price of a two-storey home increased 14.8 per cent to $595,991, while the median price of a bungalow increased 15.9 per cent to $588,320, and the median price of a condominium increased 13.8 per cent to $385,525.
"The strong seller's market is expected to persist through 2021, as demand continues to outpace supply in Ottawa," said Jason Ralph, managing partner, Royal LePage TEAM Realty. "The city is more affordable than Vancouver or Toronto and that's attractive to both first-time buyers and young professionals from across the country, especially those with families."
Ralph noted that prices are set to continue a steady upward climb as potential buyers who were unsuccessful purchasing in 2020 re-enter the upcoming spring market.
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Ottawa will increase 11.5 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.
Source: Royal LePage / Newswire
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