Toronto Condo Market
Condo sales in March 2019 totalled $1,100,438,934 for the GTA housing market. This is well up from $863,479,172 in sales reported last month, and down about 10% to $1,202,839,565 for March of 2018.
Average prices for condo apartments reached $560,020 in the GTA up from last March’s $551,003 average price. In Toronto the average price rose to $603,969 from $590,184 last March, yet is down from $612,488 last month.
Condo rentals on the other hand jumped substantially. People prefer to rent given the risk of buying and the weakness in the economy. Rent prices are up. The mortgage stress test is one more reason why potential buyers are still in the Toronto apartment and condo rental market.
Q1 Toronto Condo Report
According to the Q1 2019 report from TREB, the average sold price of a condominium in Toronto rose 4.5% to $557,377. That is up almost $24,000 from Q1 2018. 4,731 condominium apartments were sold which was down 6.8% compared to Q1 of 2018.
The total dollar volume of condominiums sold via the MLS was $2,636,948,550 vs $2,712,043,110 one year ago.
TREB reported the GTA average Q1 2019 one-bedroom condo apartment rent was $2,143 – up 7.4% to Q1 2018. Over this same q1 to q1 time period, the average two-bedroom condo rental price increased 6% to $2,811. The Toronto rental market outlook is positive.
TREB in its 1st Quarter rental market summary shows 2200 more condos were listed for rent, and the average price for 2 bedroom condos rose 6% and up 7% for 2 bedroom units. 3 bedroom units saw rent increases of 9.6% overall.
Although rental supply is increasing we’re not seeing corresponding rent prices. Urban nation in its recent report states vacancy rates remain at the ultralow level of .6%. They said condo completions in Q1 reached a 25 year high of 1849 units. Only 13,520 units have been built since 2005.
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 Heading into 2019
|TREB District||Sales||Average Price||New Listings||
Sold to Listing Price %
Current Toronto Condo Prices (TREB MLS statistics)
Prices in Toronto city districts have seen big price increases since one year ago. The precipitous drops in Oshawa condo prices is due to the troubled Canadian auto sector, with GM deciding to abandon its Oshawa plant. New auto production companies are interested in vacancy and trained workers, however GM may put the kaibosh on competitors.
|TREB Districts||Toronto Condo Prices February 2019||Toronto Condo Prices April 2018||Toronto Condo Prices March 2018||Toronto Condo Prices Sept 2017||Sept 2016||Price Change over Last 2.3 Years|
|City of Toronto||$612,488||$572,000||$651,100||$554,069||$561,376||6.23%|
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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.
Need an experienced Realtor to help you find the right property at the right price? Ask Damir Strk your questions and get reliable answers.
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