Strong December Bodes Well For Toronto Homes In 2020

The breakout trend for Toronto area freehold properties continued in December. Prices were a stunning 11% higher than last December and sales were 25% higher. Even more surprising, prices in December were actually higher than in November, which almost never happens. Despite the relative weakness in the first 8 months of 2019, total year sales of freehold properties were up 20% over 2018, and total year prices were almost exactly the same, so the last 4 months made up for the first 8. The consistent strength over the past 4 months hints at a hot spring market in 2020. Expect both sales and prices to increase significantly, although probably not to the extent that we saw in the bubble three years ago.

Prices and sales for condo apartments also continued to be healthy in December though, for once, not as strong as freehold properties. December condo prices were up 8% over last December, and sales were up 6%, though prices were 10% lower than the all-time-high reached in the previous month. Total year condo sales were up 3% while prices were up 7%. For 2020, the expect more of the same for condos, with continued growth in sales and prices, though probably not accelerating like freehold properties.

The main drivers of this strong market are continued low interest rates (with even lower rates likely to come) together with steadily declining inventory – there are steadily fewer homes for sale with steadily increasing buying pressure. Inventory has been less than 2 months’ supply for the past three months, very deep in ‘sellers’ market’ territory, though still nowhere close to the extreme that we saw in early 2017. Here also we can see the unusual strength in the market in December, as inventory almost always rises at the end of the year.

Hold on to your hats, it’s probably going to be wild ride over the next few months!