Hey there, Ivaylo Stoyanov here from the Stoyanov Group and in this video we will take a look at some of the possible projections of where the GTA real estate market might be heading in 2021 based on a certain factors that affect the economy. Before we get started keep in mind that during such an unpredictable time it is hard to forecast things for certain, but we can look at how the market has been affected before during similar circumstances and take into account the major factors that drive price in the real estate market.

It's safe to say that the January 2021 market has started off absolutely on fire with inventory levels at historical lows and prices going up with no slowing down in sight. Some of the factors that we already know are going to be influencing demand are things like increasing demand for single family homes, growing group of homebuyers in dense major cities like Toronto who have begun prioritizing space, where they may have previously prioritized workplace proximity, approximately 1.5 million new immigrants in Canada over the next 3 years and historical low interest rates to be kept where they are until 2023. Just based on these factors we can conclude that prices will continue to increase, however how long can they keep rising?

If we take the market for single-family houses, for example, this sector of the local real estate scene is showing alarming bubble-like symptoms, which are looking like what we saw in 2016 and 2017 in the GTA. One of the strong indicators that we can use to follow how price moves is Months Of Inventory. This indicator tells us how many months would it take to sell all of the inventory currently on the market. If we are at 6 months and over we are in a buyers market, if at 4 months and under we are in sellers market and in between we are in a balanced market. To put things into perspective we are currently only at 0.9 months of inventory putting us in a heavy sellers market with more than 50% of homes selling over asking.

If we take a look at our graph over the last 7 years we can see that after GTA home prices fell in 2017, the GTA housing market remained relatively stable for 18 months with roughly 3 months of inventory, but since 2019, inventory has plummeted from 3.6 MOI in Jan 2019 to under one month now.  The question now, is it going to be 3 months or 1 year before we see inventory levels sky rocket, cooling off prices and putting us a lot closer to a balanced market?

We might be seeing a steady increase of prices for the first half of 2021 with prices cooling off in the second half. When it comes to the condo market its just a matter of time before we see prices start to increase.     That is going to depend on how the rental rates do. If we see rental rates stay where they are and not decrease, we are going to start seeing a lot more investors in the market which is going to increase demand. If rental rates continue to drop, investors are most likely going to take the wait and see approach.

Overall nothing is for certain, however based on everything we will most likely see prices continue to move higher through the first part of 2021 and cool off a bit towards the second half of 2021 with condos becoming a lot more attractive in the second half of 2021 going into the 2022 market. Thank you so much for joining me today and as always if you or anyone you know is looking for a great real estate agent, GIVE ME A CALL, I would love to help.    

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