2021 GTA Real Estate Outlook from Team Kalia – Trends & Views
2021 GTA Real Estate Outlook from Team Kalia – 2020 Effects on the Market
2020 was a tumultuous year, and one which brought in many changes to our normal way of life and living. Thanks to the COVID 19 pandemic, all sectors have been shaken up. The direct impacts on economy, jobs, affordability are still being felt everywhere.
Any upheaval brings attempts at recovery, as also a shift in “needs”. Real Estate industry is no different.
We saw the market take an initial dip at the start of the pandemic, with a gradual and steady recovery, thanks to government measures to boost consumer buying power (low interest rates), and the basic resilience of consumer confidence in the market (people may hold-off buying a home for a while, but eventually they have to buy).
The shift is “need” has been witnessed in the consumer desire to move away from condo living and to settle for larger single family homes, even if it means moving away from condo apartments in the core city centers. Low interest rates have further piqued their interest to move away from condo apartments into a single family townhouse, semi-detached home or a detached home.
Short Supply Issue
Add to this, the perennial short supply issue with single family homes! What all of this has created is a pent up demand for single family homes, not just in Mississauga & area, but also in neighboring smaller towns and cities.
The GTA housing market is an evolving industry that moves directly in correlation with consumer sentiment and economic indicators. Projections for 2021 are cautiously optimistic as much hope is put on the COVID 19 vaccine to put a gradual end to the pandemic.
With faith in economic resilience and recovery, here are some of the thoughts on 2021 GTA Real Estate Outlook from Team Kalia.
First Time Home Buyers & the Condo Market Outlook
Condo apartment market as a whole was perhaps the worst affected by the pandemic, since the majority is investor-owned. High vacancy rates forced many landlords to put their condos for sale in the market. However, activity has picked up from end-user buyers and investors from October 2020. We noticed a further uptick after the COVID-19 vaccine announcement in mid-November.
Buyers and investors secured some of the best deals in the market (from Apr 2020 to Oct 2020) and now many more buyers have entered the condo market. We have witnessed this when working with our buyer and investor clients and in our own listings: 2 BR+2WR Condo at Tridel Ovation, Duke of York and 3 BR Condo Townhouse in Erindale.
Buying on Work Permit Is a Growing Trend
Lately we have been helping many work permit holders to achieve their home buying dream in Canada. Since every work permit holder’s situation is different, and it becomes quite technical when it comes to buying on a work permit, we refer our work permit clients to a reputed law firm who have an immigration experts on their team. They provide free consultation to our work permit buyer clients.
Some of these work permit buyers have already secured new builder projects with us, which will be ready in 1-2 years. This assures them that the properties will appreciate and the amount they spend now on renting will balance out with the appreciation on their own property.
We have seen appreciation of about 15% to 25% on these kind of properties within the last 9-12 months. So it makes sense for many first time buyers and work permit holders to buy in Canada. Some of these buyers qualified to receive exemption from paying 15% foreign buyer’s tax under the NRST rules, Every situation is unique and we work with the right professionals when it comes to NRST. Some of the work permit holders were qualified to buy properties with as little as 10% down payment.
Freehold Market
Freehold residential market has been crazy. Our Team is competing with 25-30 offers for every other home on the market. In the first two weeks of January itself, we have heard of 70 offers being submitted on a Churchill Meadows area townhome, which sold almost $200,000 over asking.
There is no logic left.
But how long can this craziness last?
Buyers need to tread very carefully. We are more careful when it comes making our clients bid on properties where we feel that the appraised value will not be the same in the bank’s opinion. It is rather strange that bank’s to date have not come down hard on these overpriced homes.
The bidding war situation is worse than what it was in 2017, and we feel that the government should do something to slow down the market, as it is going out of hand. People who had bought homes at peak prices in 2017 are now heaving a sigh a relief as the current prices have surpassed the high price they paid back then.
Now that the competition has increased manifolds, buyers have to wait much longer to find a home.
Due to the high price gap, they are either opting for builder new homes in nearby cities or are flocking back to condos.
Builder freehold new homes are also not that easy to secure. Builders are increasing anything from $10,000 to $100,000 on the launch prices within a matter of few weeks.
This is a great time for sellers, especially downsizers who are thinking of selling and cashing out rich taking advantage of the current seller’s market conditions.
Builder New Projects
We are excited that there will be many projects which we will be introducing around the GTA in 2021 in cities like Oshawa, Ajax, Pickering, Kitchener, Waterloo, Cambridge and Hamilton areas. We are not able to advertise most of these projects as there is not a lot of inventory.
So we introduce these great buys to our buyer clients who have signed up and are committed to work with us. Contact us at 905-339-5111 if you’d like to book a builder new project.
Assignment Sales
Doing an assignment sale requires specialized skills. It is not easy to put together assignment transactions. We have bought and sold some builder new condos at Square One in Mississauga, where both the parties (assignor and assignee) landed a win-win situation. Condos which were bought by our investors in 2017 for low $300,000s, we have sold to our assignees in $450K range, which is still $30,000 below the current market prices of similar units in the market.
Full Home Staging vs. Virtual Home Staging
This is a hot topic these days because many REALTORS® including Team Kalia has done virtual staging and the results are fantastic in creating buzz and bringing a lot of traffic. The reason we chose virtual staging recently is because the subject property with full staging might not have looked as nice, as it needed new kitchen and bathroom. Full home staging would not have made a big difference as people would notice how dated these areas were.
What we created was a visual experience online with virtual staging. More people came to view the property in 3 days, resulting in 30 showings and 3 offers. We ended up getting more than asking price for this property.
Selling Your Property with Team Kalia
Our team offers both full staging and virtual staging. When we list properties with virtual staging as opposed to full staging, the savings is passed on to the sellers.
Virtual staging costs only 1/3rd the cost of full staging. With our three different commission plans, the net money you pay as commission, would be same because every plan comes with optional add-on items.
You can list and get your home or condo SOLD in three easy steps:
