Real estate giants RE/MAX and Royal Le Page have both provided their outlook for next year. RE/MAX is predicting the Toronto housing market will favour sellers in 2020, with the average residential sale price increasing by 6% in the coming year to $933,691. This is largely based on the increased demand in the detached home market, better employment rates and economic growth, as well as improved overall affordability in the Greater Toronto Area.
Driving demand in 2020 will be move-up buyers with the properties of choice being townhomes, condos and detached homes. Some of the popular neighbourhoods to watch out for in 2020 will be Durham region and West Scarborough due to their affordability, proximity to transit and access to employment in Toronto’s downtown core.
Last year RE/MAX projected that the average residential price would increase by 2% in 2019. As of October 2019, the market was showing an 5.4% increase, indicating that forecasting is just a tool and it is truly the market that dictates the results.
The other real estate giant, Royal Le Page has predicted with the increase rate of immigration and the lessening impact of the mortgage restrictions Canadian house prices are to increase by 3.2% in 2020.
In Toronto, Royal Le Page predicts that the average sale price may increase by 4.5% to $1,027,200, as low supply and growing population drive demand. The period of excessively high price growth in the condo segment is drawing to a close and millennials are shifting their demand from condos to detached homes, eyeing the suburbs that their parents coveted. However, the real estate company does forecast that the average sale price for condominiums would increase by 6% in 2020.
Those homebuyers who may have put plans on hold when more stringent mortgage rules were enacted last year have started to re-enter the market. This increase in homebuyers along with immigration will drive demand next year, but should the economy weaken, and the Bank of Canada lower its interest rates, the effect could be higher prices.
Sellers are compromising and buyers are realizing that prices are not going any lower. In 2020, we should see a modest price bump, but we are also expecting a healthy gain in sales activity.