Top carriage trade agent on the biggest year in Toronto real estate history

From record home prices to major supply concerns, 2021 has been a truly unprecedented year in real estate for Toronto. We spoke with real estate agent Barry Cohen, the man who sells more multi-million homes than anyone else in Canada, on what he calls the best year ever recorded in Toronto real estate history and what he predicts for 2022.

What has made 2021 the “best year ever” for real estate in Toronto?

2021 is already the best year on record for real estate activity in the GTA. According to TRREB Market Watch, by November 2021, residential sales in the GTA had already surpassed the previous record high set in 2016 for the full year (115,716 versus 113,040). YTD (year-to-date) unit sales from January to November were 31.4 per cent ahead of YTD 2020 levels (115,716 versus 88,026). The average home price YTD in the GTA soared 17.5 per cent to $1,092.212 (an increase over the YTD 2020 average of $929,419). The last time we saw values climb so significantly was the 17.3 per cent year-over-year increase reported in 2016 (versus 2015). Values rose across the board in 2021, affecting both freehold and condominium properties. Active listings fell to 6,086 in November, 55.9 per cent below the November 2020 figure of 13,798 and the 10-year average of 13,767. The only November that was remotely comparable was November of 2016 when active listings fell to 8,639.

What problems do you foresee coming up for the market in 2022?

The same factors that influenced homebuying activity in 2021 – low interest rates, threat of higher interest rates and flush bank accounts – will likely stimulate sales in 2022. My two concerns for the year ahead are a continuation of tight inventory levels, prompting further escalation in price, making it increasingly difficult for buyers – especially first-time buyers – to get into the market and government intervention at either the federal or provincial level.

What’s the biggest issues facing buyers for 2022?

With the supply crisis expected to continue to wreak havoc on the GTA’s housing market in 2022, buyers need to be prepared to move quickly. I typically advise my clients to get pre-approved as soon as possible, narrow down the communities they would be interested in living in, familiarize themselves with the list price and sale price of properties in the last three months so there are no surprises when they are making offers and, most importantly, to stay within budget. For existing homeowners who are looking to trade up to larger homes, bigger lots sizes or neighbourhoods that are closer to the core, buying before selling is recommended, but the possibility of carrying two homes at the end of the day doesn’t always sit well. Keep in mind that real estate is fluid. Don’t play the predictions. Buying and selling in the same market is my best advise.

Do you anticipate “buyer fatigue”? Will Torontonians potentially tire of this expensive and competitive market and tap out?

It’s unlikely but possible. Pandemic-fueled demand for real estate has sparked renewed interest in both freehold and condominium properties in the GTA and all points beyond. However, as long as COVID-19 and its various mutations exist, the so-called race for space should continue.

With Omicron raging, will we see a continued trend in suburban housing demand as people realize they won’t be returning to the office any time soon?

Work-from-home hybrids were already underway at most organizations so the fact that there will be a longer delay in getting back to the office isn’t going to significantly change moving plans. Movement both in and out of the city should continue at a brisk pace.

What do you anticipate happening in the condo market?

Affordability and low interest rates drove sales of condominiums apartments and townhomes throughout 2021. We saw a substantial dip in condominium apartment sales in 2020, with market share dropping to 22.7 per cent, only to bounce back up to 27.4 per cent in 2021. Townhomes were able to weather the storm, with market share sitting at 7.7 per cent in 2020 and rising to 8 per cent in 2021. Values for both have also climbed year-over-year (January to November), with the average YTD price of an apartment up 7.4 per cent to $679,212 (vs. $632,618) and townhomes up a more substantial 17.7 per cent to $767,385 (vs. $651,825). Demand will continue to grow as the disparity between freehold and condominium values climbs. For many first-time buyers, condominiums are and will remain the first step to homeownership.

What other trends can we expect for 2022?

The pandemic has changed our world and there is a good chance that those changes will become permanent. House and hearth will remain at the top of the list for most Canadians, many with preparation for future lockdowns top of mind for the foreseeable future.

Trends expected to continue in 2022:

Buyers continue to seek space and will be willing to travel outside the 416 to realize the homeownership on their terms. There will be a big uptick in markets surrounding the GTA, including Milton, Hamilton, Barrie, Innisfil, Durham, Kingston and more.
Movement back into Toronto’s core.
Multi-generational living – we will see parents, grandchildren and children living together in the same units.
·While the condominium lifestyle will continue to thrive, demand may increase for units located on lower floors and those that offer balconies. Balconies will likely be included on most new construction moving forward.