Tracking the Vaccine Ripple: How Toronto’s real estate market reacts to shots in arms

Published On: 20 July 2021Categories: by Dorr Capital

From May 2020 to May 2021 the average house price in the GTA leaped from $880,000 to $1,045,800. However, that year-over-year nearly 20% increase should come with a giant COVID-19 asterisk. Now that Ontario is on the 50%+ side of adults with two vaccine doses, the real estate market and the rest of the world are changing.


COVID-19 impacted just about every aspect of our lives. After the “two weeks to flatten the curve” extended almost indefinitely, Ontarians started making moves. Over a year later, as we come out of the lockdown fog, the larger ramifications on the housing landscape are more evident. A recent online study by Zoocasa asked 2,300 Ontarians how the pandemic affected their real estate choices.

Here are some key takeaways:

– 50% of aspiring buyers feel the pandemic set them back 1-5 years

– over a third of renters say they now have fewer rental options within their budget

– 78% of respondents feel the pandemic caused real estate prices in suburban areas and smaller towns to rise at unsustainable rates

– 32% of respondents who purchased a property since COVID-19 bought in an area they would not have considered prior to the pandemic

– 73% of respondents who purchased a home during COVID-19 plan to keep their property once the impact of the pandemic subsides

– 77% say that homes in the city or town where they lived in March 2020 are now less affordable than a year prior

– 43% of house owners and 28% of condo owners said they would not be able to afford their home if they had to repurchase it today


As Ontario readies to enter Step 3 of the Roadmap to Reopen plan, many wonder what the future holds. Bank of Canada Governor Tim Macklem said “You are starting to see some early signs of some slowing in the housing market.” Like many other bankers, he offered a cautious approach saying, “We are expecting supply to improve and demand to slow down [and bring] the housing market into balance.”

Canadian Real Estate Association (CREA) June data echoes Macklem’s statement. Of note, home sales fell 7.4% in May, down from an already 11% decline in April. CREA chair Cliff Stevenson offered, “While housing markets across Canada remain very active, we now have two months of moderating activity in the books, and that goes for demand, supply and prices.” He continued by saying “… there is anecdotal evidence of offer fatigue and frustration among buyers, and the urgency to lock down a place to ride out COVID would also be expected to fade at this point given where we are with the pandemic.” These statements are supported by a 6.4% decrease in homes hitting the market in May vs. April, which in turn decreased 6.1% since March.


The Ontario real estate market, much like the rest of the province, is in a state of flux. For those who didn’t (or couldn’t) move during the pandemic, it may feel like the storm has passed. The need for more space to accommodate life from home may be less pressing. But as businesses, schools, and communities begin to reopen, so too will our borders. Immigration is at the core of Canadian society. New citizens bring innovation, culture, and community that push our nation to be more competitive on the global stage. However, when new Canadians arrive, they need housing. And for a country like Canada whose ratio of housing units to population has fallen since 2016, that’s a problem. Scotiabank economist Jean-François Perrault is vocal on the matter saying that “Canada’s housing-to-population ratio is the lowest of any G7 nation. To match the average ratio of the G7 [we] would need an additional 1.8 M homes”, a staggering number that equals roughly the total number of new homes built over the past decade.

Dorr Capital’s crystal ball is still a little cloudy, but one thing that is abundantly clear is Canada is in a severe housing deficit. When one demand subsides, another takes its place. And any Canada Mortgage and Housing Corporation stress tests or interest rate adjustments will have little bearing on that. The only real and sustainable solution is robust policy reform and investing in real estate to increase housing supply.

Dorr Capital is a boutique mortgage investment corporation specializing in land and construction loans in the GTA. 416-484-9747


Update – June 29/2021

We have launched RealAlt Investments – a Mortgage Fund Trust, licensed under the Exempt Market Dealer, investing in Land & Construction development, building communities in Ontario. For more information please visit this web page on our site.

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