TRREB Raises 2021 Home Sales Forecast

The Toronto Regional Real Estate Board (TRREB) has revised its 2021 home sales forecast for Toronto, ON, from 105,000 transactions upward to 115,000 transactions due to record first quarter 2021 sales results, but still accounting for sales trending below record levels for the remainder of this year. June home sales in Toronto were up compared to last year, but remained below the March peak and were lower than the number of transactions reported for May, consistent with the regular seasonal trend. On a month-over-month basis, both actual and seasonally adjusted sales continued to trend lower in June. The reasoning underlying the sales forecast change was that an improving regional economy and very low borrowing costs would continue to fuel strong demand, but this demand would ebb somewhat in 2021 because of stalled population growth due to pandemic-related border closures. While sales do appear to have peaked this year and TRREB is no longer reporting record months in terms of home sales, first quarter activity was higher than expected. March home sales, at over 15,000, represented an all-time monthly record. TREBB says that Toronto’s plans to increase the land transfer tax for properties priced over $2 million would constrain inventory, making an even more challenging environment for buyers.