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3 Predictions for the 2021 Mississauga Real Estate Market

Before we dive in the predictions for the 2021 Mississauga real estate market, please check out my predictions in 2020 to see how I fared!

Year in Review

Where do I start?  This Year in Review is unlike any other we’ve ever been through. For the first two months of 2020 the market was red hot and then of course COVID hit and we came to a complete standstill. We were afraid to walk into a grocery store let alone walk into someone’s home for a showing. Only those caught between transactions were still out there.

And then the summer came and cases dipped and there was a sense of optimism in the air coupled with a dash of opportunity. I could sense, on the investment side of real estate, that my clients were eager to put their cash somewhere. While some chose to stay and do major renovations to their home, others were looking to pre-construction condos or homes outside of the GTA to invest in. And others decided to take advantage of work from home and pull the trigger on more affordable homes outside the core. Either way, for the fortunate, they had money to put into the real estate market.

After a blazing hot June (I’ve literally never seen more listings/sales in a month), we settled into four months of extremely strong sales and price increases that finally tapered off in November and December. With the turn of winter, cases rising and another lockdown underway, we’ve seen the typical decrease in December activity. But what we didn’t see was the typical falling of price in the detached segment. That remained incredibly high whereas the condo market continue to stagnate.

As we turn the calendar to 2021 it’s going to be incredibly difficult to predict what the year has in store. But, that’s what we’re here for, so let’s take a stab!

The Condo Market

In contrast to previous years it’s the condo market that has taken the biggest hit in 2020. For obvious reasons, people have left cities for homes further outside the core. With very little immigration, international student base, tourism etc. many investors have sold off their properties as rental prices have come crashing down this year. 

With that said, there is renewed optimism with vaccines beginning to be employed, so many in the industry are sensing now would be an opportune time to re-invest back into the condo market. Time will tell if that was the right decision but there are certainly many deals to be found right now.

The Freehold Market

The freehold market has been on an absolute tear since June with no real end in sight at the moment. As we’ve pushed into late Fall and winter there certainly are opportunities to find homes as usual, so I think people should act quickly before we see another rise in the new year.

However, many want to see how this next lockdown will play out and affect the greater economy. There’s a lot of uncertainty at the moment, but the numbers are already staggering with a huge 15% year over year increase in the detached segment from 2019.

So, How Did We End 2020?

  1. Prices Are INCREASING…in the freehold segment
    In a reversal from the last couple of years it’s now the freehold segment that’s driving price increases. In fact, the charts above don’t really due it justice as the condo market has stagnated. Detached homes are up 15% year over year, semis are up 14.5% and townhomes are up a staggering 21.3% year over year. Condo townhomes are up 9.1% yoy while condo apartments are up only 1.2%.
  2. Sales Are UP, Listings are FLAT (for now)
    It’s hard to quantify the yearly stat as COVID has obviously affected the ability to trade for three peak spring months. However, we can see the trend coming. December listings and sales are over 70% higher than a typical December. I’m not sure this pace will continue but it seems clear there is motivation to trade come 2021.
  3. Average Days on Market are DOWN & Inventory is DOWN
    The months of inventory hit a staggering 1 month in December. That means that if no new listings were added to the market all existing inventory would be sold in about 30 days. Again, it’s a tale of two segments. Freehold homes are moving quickly and condos are taking a very long time to sell. Will this trend continue into 2021?

3 Predictions for the 2021 Mississauga Real Estate Market

1) Prices will go up again…

I know one thing for sure…with renewed optimism due to vaccines and a continued push to work from home, we’re going to continue to see increased demand at a higher pacer than supply. We all know that leads to higher pricing but by how much? Can the market continue to sustain 15-20% year over year growth?

This is where I wish I had a crystal ball but unlike economists I’m not entirely stat-driven and I listen and talk to my friends and clients and the sense I get is many are gearing up for a change by the Spring. 

2) Interest rates will move up slightly

I can see a scenario where rates are moved up very slightly by the banks – not by much but I think they’ll start squeezing a few more percentage points out of fixed rate mortgages. Interest rates have continued to sit at rock bottom rates and the central bank hasn’t wanted to move them for fear of disrupting market recovery but I think it will be slightly more expensive to get a mortgage through 2021. But I’m confident they’re going to remain low for the long-term. This will continue to be another component of increased demand.

3) The condo market will return by at least the Fall

It’s coming. It won’t stay down forever. The price gap between condos and freehold homes is higher than it has ever been before. At some point in 2021, people will move back into condos as they seek affordability and availability. Pre-construction condos will continue to be an important driver of investment as well.

I don’t know when this will happen but if the vaccine rollout is accurate and we can return to a functioning society by the Fall, then a return to work and urban centres will follow. Prices will rise and so will rents although less quickly for the latter. If I were investing this year, I’d be looking to the condo market in the early part of this year as like most years, it’ll likely be a bargain by the time of the 2022 predictions post! 

The Wrap Up

2020 was the most upside down, insane year of my life and probably for most people as well.  I have absolutely no idea what is in store for 2021 from a COVID perspective but if the market continued to defy the reality of the overall economy, it wouldn’t shock me in the slightest. For all my first timers out there I certainly hope prices can stay in this ballpark, if not aim for condos now while you can. The condo townhome or stacked townhome is still an affordable option that appreciates very well during the best of times! 

Good luck hunting, selling or investing in 2021 and remember real estate is a long game…

Photo credit to – Christian Schnettelker – www.manoftaste.de 

I’m Mike. I created this website. I'm a real estate sales representative, but I’m a consumer behaviourist at heart. I like to understand what makes people tick and find out what’s really important to them. I value honesty and integrity over everything. I’m fiercely competitive and loyal and view myself more as a consultant than salesperson. In my free time I’m a registered sportsaholic and TV junkie.

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