Home prices, sales surge in pandemic

Toronto home prices reached a record in 2020, with the COVID-19 pandemic driving demand for larger homes and low rates making it easier for people to afford them.

The average price for homes sold in Canada's largest city last year hit $930,000, the highest on record and up 13.5 per cent from 2019, the Toronto Regional Real Estate Board said Wednesday in a release. The buying frenzy was led by demand for ground-level homes in the suburbs, which more than offset weakness in condominiums in the city's core, the board said.

The pandemic has caused home prices to soar across the developed world, as the low borrowing costs employed to stimulate locked-down economies also increase property buyers' budgets. A Canadian bank offered a mortgage rate of less than one per cent for the first time last year.

In Toronto, the prospect of new taxes on vacant homes and concerns about a potential bubble have done nothing to stem bidding wars. In fact, its housing market appears to be picking up pace.

After three straight months of declines, activity shot up 22 per cent in December, with 11,264 transactions on a seasonally-adjusted basis, the highest monthly total on record. Sales for all of 2020 surpassed 95,000, up 8.4 per cent from 2019 and the third-highest number of transactions on record.

In December, the average price of homes sold in the region was $932,000, about 11-per-cent higher than the same month in 2019.

Meanwhile, Montreal had the best December on record for home sales last month across every one of the city's neighbourhoods, according to the Quebec Professional Association of Real Estate Brokers. The association said agents sold 4,613 Montreal homes in December, up 32 per cent from 3,503 during December 2019.

Montreal's median price for a single-family home was $430,000 in December 2020, 21-per-cent higher than the same time last year, with condo prices up 14 per cent to $325,000 and plex prices up 10 per cent to $640,000.

But the association's director of market analysis, Charles Brant, also said the pace of condo listings exceeds condo sales on the Island of Montreal.

While 44-per-cent fewer single-family homes were listed for sale in December compared with the same month last year, condo listings in Montreal spiked 18 per cent to the highest December level since 2012.

On Tuesday, the Real Estate Board of Greater Vancouver said home sales jumped 53.4 per cent in the final month of 2020 compared with December 2019.

The board said the composite home price in Vancouver ended the year at $1,047,400, up 5.4 per cent from the same time last year.