Hey everyone, Ivaylo Stoyanov here from the Stoyanov Group and in this video I will be doing a 2020 year review, highlighting some of the factors that affected our real estate market in 2020 and what we can possibly expect in the 2021 market.   It’s been a wild year for real estate. It’s difficult to think all the way back to the beginning of 2020 as it feels like it has dragged on for an eternity and, at the same time like we’re still stuck in a March quarantine time-loop. Despite the fog of the year, plenty has happened in real estate. You could say that this year has been one of the most surprising and exciting in quite some time! 

Going into 2020, many experts predicted that the real estate market was long overdue for a crash. After all, we’ve enjoyed over a decade of steady growth in Toronto and the GTA. Of course, we know that despite an economic recession, the housing market of 2020 defied every expectation. So...what happened?

 Interest rates were and continue to be at historical lows which played a significant role in the health of the real estate market — namely, in sustaining demand. Of course, these interest rates were a major incentive for homebuyers and investors to seize the opportunity to acquire new properties. In many ways, the continuation of low interest rates throughout the year has been a major contributor to sustained real estate demand despite the year’s unexpected economic and social challenges. Interest rates alone were not the only motivation we saw in homebuyers. The pandemic was something no one saw coming, and there was no telling how the market would react. 

The immediate reaction in real estate was a sudden retraction. We saw homes taken off the market and all along with that saw sales stall. Thankfully, the market quickly bounced back from its grinding halt for two major reasons: the incentive of interest rates combined with shifting homeowner and rental resident priorities. We saw a surge of demand for single-family homes. This growing demand was largely influenced by the pandemic — highlighting a need for more space between neighbours, square footage, home office space, and outdoor areas. Not only that but the work-from-home trend, both temporary and permanent, incentivized some to move out of crowded, expensive markets in exchange for a more spread out suburban lifestyle. 

With tight inventory still an issue, this naturally created a rise in housing prices. Because supply is tight and demand has been unstoppable, it’s unlikely that we will see a state of hyper-supply or collapsing prices anytime soon. Of course, we also must take into account the economy as a whole and where things might be going. Analysts are predicting a steady increase in price this year by 9.6% across the GTA with freehold properties leading the way. This can of course change if the economy takes a turn due to longterm closures and no government financial help causing home owners to increase supply.

One thing is for sure that 2021 is going to be an interesting year and analyzing the numbers on monthly basis is going to be super important.