It has been an unpredictable year in the Toronto real estate market, and there are many trends to consider for 2021. In Metro Toronto there are now two distinct real estate markets, the housing market with rising values, and the condo market with very little price growth. With mortgage rates at historic lows, investors and buyers would assume there would be some benefit. Yet higher unemployment affects the benefits of low rates. Here are the trends to look for in the Metro Toronto real estate market.
How COVID-19 Has Affected The Market
According to the Emerging Trends in Real Estate report released this year, COVID-19 has accelerated the pace of change for developers, buyers, and sellers because of its impact on retail, office spaces, as well as suburbanization. The report advises that the most lucrative and safe opportunities in 2021 include warehousing and fulfillment, multifamily residential, and medical office space.
“The coming year will be all about embracing opportunities to be resilient in the face of uncertainty while shifting strategies in anticipation of market headwinds,” says Frank Magliocco, National Real Estate Leader, PwC Canada. “For the first time in a few years, we’re hearing divergent views from industry players about issues like the future of office spaces and the urbanization and suburbanization trends.” Toronto executive Larry Weltman agrees, and says a key strategy will be to focus on solutions for the retail sectors.
Urban Demand
Since March, the market has seen a drastic shift in what homeowners are deciding to buy. Canadians are moving away from large cities like Toronto and Montreal and are now looking at suburban and rural areas because of the affordability and space. As more people work from home and seek properties in rural spaces for a healthier home office, the demand for urban areas has exploded, and will continue in 2021. The report mentions that an “18-hour city” trend will accelerate across Canada, for example in larger city centers like Toronto and Montreal or in places like Victoria, Quebec City, and Halifax.
There is an uncertainty in the return-to-office process, as the market waits to see the new working future. Some experts predict that employees will return to the office because of the missing social connections, while others wonder if the pandemic will create a new interest in suburban office development. After months of working in a new open-spaced environment, many view the idea of a comfortable urban office as a better wellness lifestyle choice.
According to PwC Canada’s Workforce of the future survey published in September, 34% of employees surveyed said they prefer to work mostly remotely, while 37% prefer an office most of the time, and 29% consider a fifty-fifty split with both options. “We’re hearing different points of views on office space. Companies that have the digital capabilities to have a remote workforce are now reevaluating their real estate portfolio needs,” said Magliocco.
Property Technology (Proptech)
Before March, the real estate industry was already using proptech platforms such as digital showings and drone footage, but since the pandemic, the use of technology has transformed the Toronto market. Homebuyers can now view every room of a property with HD, 360-degree views, as well as get instant analytics on price, agents, and even schools. For 2021, this technology will accelerate even more to streamline customer engagement, sales platforms, and tools to manage costs. Cybersecurity will also be at the forefront of these new proptech platforms, as fraud is expected to grow with the market.
