Despite the worst recession since the Great Depression, Toronto real estate is booming.
The boom isn’t occurring because of affordability. The proportion of income used to pay mortgage principal and interest, property taxes and utilities is approaching the 1989 high.
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The Toronto housing market is bifurcated. Condo listings have risen dramatically, as Airbnb hosts abandon ship. Meanwhile, listings of detached homes have plummeted. Prices have reacted accordingly, with condo price appreciation lagging behind. The median detached home in Toronto has appreciated by 28.2% over the past year.
Despite the difference between listings, months of inventory for both condos and detached homes in Toronto remain very low. Toronto remains a tight housing market.
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The state of the Toronto housing is also showing up in average days on market data. At all price points, home sales in Toronto are actually happening faster than in 2019.
As a result, prices have risen across all home sizes for detached homes in Toronto year-over-year.
Similarly, Toronto condo prices have risen across all sizes, but (as previously indicated) to a lesser extent.
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What happened to the real estate crash everyone was predicting?
While the lockdowns did create a dip in prices across Toronto. Prices have recovered from the dip. Note, however, Toronto got a boost from a hot market going into 2020 before the lockdowns occurred (see the February price increase).
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Government benefits are helping to keep the system whole.
48% of the Canadian workforce is currently receiving CERB (Canadian Emergency Relief Benefit). That equates to over 20% of the population for most provinces, with a huge proportion of beneficiaries residing in Ontario alone.
The question remains: are these benefits propping up the Canadian housing market and can they be gradually removed without creating significant housing market disruption?
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