Toronto Home Prices Hit Record in 2020 on Pandemic Buying Frenzy

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 C$930,000 ($734,000), the highest on record and up 13.5% 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 used to stimulate locked-down economies also increase property buyers’ budgets. A Canadian bank offered a mortgage rate of less than 1% 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% in December, with 11,264 transactions on a seasonally-adjusted basis, the highest monthly total on record, according real estate board data. Sales for all of 2020 surpassed 95,000, up 8.4% from 2019 and the third-highest number of transactions on record.

In December, the average price of homes sold in the region was C$932,000, about 11% higher than the same month in 2019, the data show.

— With assistance by Erik Hertzberg

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