Toronto Condo Market 2019
Just as in the Toronto housing market forecast, this summer and fall Toronto condo market forecast is once again being pressured by a squeezed supply of condominiums. Listings are down as owners take their condos and apartments into the rental market, since rent price controls have been lifted and rents are rising.
Compounding the matter is the number of owners renting out the condos. The end of rent controls in Toronto has grow units for rent substantially (see rent price stats below) and that competition has moderated price growth. But as units get rented and supply tightens, we may forecast strong rent price growth right through 2020.
Sales of condos rose 3.2% compared to last year with prices rising 5.9%. In the city of Toronto, condo prices rose to an average $639,316 up $36,000 from $603,527 last year. 200 more condos were sold in July vs July 2018.
Q2 Toronto Condo Report
According to the Q2 2019 report from TREB, The average price of a condominium apartment increased by 5.1 percent from $561,343 in Q2 2018 to $589,887 in Q2 2019.
7,038 condominium apartments were sold via TREB’s MLS® System in the Q2 of 2019. This result was up by 3.2% compared to Q2 of 2018. The total dollar volume of condominiums sold via the MLS was $4,151,624,817 vs $$3,837,870,476 for Q2 of 2018. Sales grew from 6837 units to 7038 units YoY.
Active condo listings across the GTA Mls region fell from 4,005 to 3,708, a drop of almost 300. New listings 11,110 fell about 400 units to 11,508 in Q2 2019.
TREB reports a positive outlook on condo rental prices and availability as rental listings increased 28%. However, the vacancy rate in Toronto is .7% which is very tight. They report 9,749 condominium apartment rental transactions happened via their MLS® System in Q2, 2019. That is a significant 14.9% jump over Q2 2018 rental numbers.
TREB says the average Q2 2019 1-bedroom condo apartment rent price in the GTA was $2,192, up 6.7% vs prices in Q2 2018. Over the last 12 months, the average two-bedroom condominium apartment rent increased by 4.3% to $2,873.
Although rental supply is increasing we’re not seeing corresponding rent prices yet.
Urbanation which covers condos built since 2005, says the availability rate (includes both vacant units and occupied units where the tenant has given notice to vacate), increased from 1.4% to 2.3%. This does not include buildings released in the last 12 months.
Urbanation says rents grew 7.7% in Q1 (through the MLS) which was lower than 1st quarter 2018. No slow down here. Monthly condominium rents for units leased during the first quarter averaged $2,376 across the GTA.
Toronto Condo Developers Optimistic
Buyers in Toronto have turned to the condo market as an alternative resource to the Toronto single detached home market which is priced much too high. Most residential purchases in the Toronto GTA area are condos.
And the spirit of condo developers doesn’t seem to have been dampened. This could be that Toronto’s economy has held up okay, and a rising population is desperate for accommodations. Developers submitted applications for 42,841 purpose-built rental apartments in the 1st quarter, which is 20% higher than the total proposed inventory of 35,834 units as of Q1-2018. And it’s almost 50% higher than the 28,841 units proposed in Q1-2017.
Proposed doesn’t mean they’re feasible or will be allowed by the governments.
Rents grew only .7% in Toronto, but higher at 1% in Peel region and 1.1% in Durham region.
The huge Toronto condo market is woefully inadequate to fulfill buyer demand. The fact is Toronto is growing and condos will be in continuous demand. It’s all about mortgages and price. As recommended by TREB, the mortgage stress test rules should be abandoned by the government. Yet Canadian debt is a big worry in some cities.
Canadian consumers are on the edge and cannot survive a recession. Which is why many hang on the news about trade with the US and China. It’s a terrible situation the Canadian government has pushed Canadians into.
Constrained supply is causing residents endless misery. With prices so high, no purchases can occur and therefore no economic boost occurs from housing construction and sales.
Toronto Condo Prices Headed into 2019
|TREB District||Sales||Average Price||New Listings||
Sold to Listing Price %
Current Toronto Condo Prices (TREB MLS statistics)
|TREB District||Toronto Condo Prices 2nd Q 2019||Toronto Condo Prices 3rd Quarter 2018||Toronto Condo Prices March 2018||Toronto Condo Prices Sept 2017||Sept 2016||Price Change over Last 3 Years|
|City of Toronto||$639,316.00||$598,660.00||$651,100||$554,069||$561,376||13.9%|
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New Condo Construction in Toronto
The new mortgage rules now enforced means many buyers will only qualify for a much lower mortgage. Still buyers are eager to purchase as seen in the new construction condo sector. It will be some time before new construction can save the day.
You likely have your own opinions about government meddling in the markets, however such interference can be a housing crash factor in itself.
Should you invest in a new or resale Toronto condominium? Given the election uncertainty, and rising unemployment rates, you should be certain. The negativity in the Canadian economy is a key reason the Feds have pushed the stress test red tape so strongly. They don’t believe things are going to go well.
Millennials Are Driving The Toronto Condo Market
They’ll need more creative mortgage financing and improved condo searches to find condomium they can afford in Toronto. To save they might have to search further to Brampton or Ajax. Although the mortgage changes in 2018 will put an extra burden on them, and force them to stay in the rental market, they will likely have more money in the spring to buy a condo.
There’s big investor demand for condos too. Student housing is in a severe crunch in Toronto and Vancouver. Investors are well aware of the rental potential of condos and many may be investing in the Vancouver condo market and here in Toronto because of so much rental demand.
If you can’t earn a profit on capital appreciation, you can still make it on rental income.
Big Demand for Condos as Entry Level Homes
Most home buyers in the Toronto area can only hope to own a condo. Homes are averaging over $1.5 million in some areas in the GTA. And condo developments are offering more for tenants. And perhaps the key feature of Toronto condos is their proximity to work, leisure, restaurants and shopping and freedom from the grinding commute that many Torontonians face each day. So there are good reasons to buy a condo in Toronto.
Oddly, the condo market in Toronto is much less volatile than the single housing and townhouse market in Toronto. Her foreign buyer tax and rental price controls look like they’ll miss the mark.
Where are Toronto’s Best Investment Condos?
As the graphic above shows, the top location is Toronto Central (where home prices are highest too), Toronto West and Mississauga. The bulk of these listings are in huge mega-sized condo towers and there are more of them being built. Toronto Central is also close to the U of T, Ryerson, and other colleges where off campus housing is in hot demand. It’s the same situation for Vancouver condo rental and investors should take note.
Toronto’s C02 district is your million dollar listing area. With an average price of $1,050,000 these are your Toronto luxury condos. This area is located just north of Downtown/Bloor st, near the University of Toronto. This suggests that proximity to U of T and downtown offices may be the primer driver of Toronto condo prices.
What are the Predictions for the Toronto Condo Market?
Urbanation says Toronto condo rental rates will shoot up another 11.2% . That ridiculous might tell you that condo prices themselves will be rising through 2019 and 2020. The shortage will begin to show and if trade is smooth with the US, prices could rocket.
“The $231 average increase over the past year was the largest ever recorded by Urbanation, with rents having risen by $367 in two years,” — Urbanation
Should I Buy a Condo in Toronto?
Should you buy a condo in Toronto, Mississauga, Scarborough, or Brampton? As we’ve seen in the Toronto housing report, demand for condos arises from a lack of traditional single detached family homes. Toronto is crowded, and politicians are not saying they will solve the crisis.
That means there likely will be intense pressure on condo availability and prices. For income rental housing and condo as investment for Toronto’s workers, the value seems obvious.
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