While news headlines show dramatic changes in market conditions from 2016 to 2017, if one looks deeper, the picture is much more stable than would first appear. It’s important to note that 2015 and 2016 were not typical years. With an almost frantic pace fueled by low inventory, buyers scrambled to buy, resulting in bidding wars and a huge upswing in sales numbers. The activity seen in those two years make the return to more normal conditions in 2017 and 2018 appear much more dramatic than they actually are.
According to this recent Globe and Mail article, the Toronto Condo Market remains strong, proving a viable alternative to single detached homes. Buyers are feeling the crunch in affordability due to recent changes with mortgage rules and rates, and the addition of Ontario’s Fair Housing Plan, and are opening up to the possibility of living in a Condo that’s priced within their means.
While sales in single-family homes are showing a decrease from 2016, multi-family residential is seeing a boost. In 2017, Altus reports that builders sold 36,429 new units last year, “smashing” the prior sales record in 2016, when 29,132 condos were sold. This further illustrates the shift towards a more affordable multi-family home.
TREB is also reporting that the average price climbed to $515,816 in 2017 over $437,412 in 2016, and is reporting a consistent 23 days on market average. As well, in the City of Toronto, the average sales price / listing price comparable in the last quarter of 2017 was at 99%. (Ratio of the average selling price to the average listing price for firm transactions entered into TREB MLS).
In new building, BILD reports that the market at the end of 2017 was largely driven by multi-family residences, primarily due to changes in government intensification policy and challenges builders face in bringing single family homes to market. This indicates a growing interest in multi-family residences and continued strengths in price and sales rates.
Finally, investors have always taken advantage of closings typically 2-3 years away in new Toronto Condo developments. Now is a good time to buy in anticipation of housing sales catching up from the recent government changes by 2020 or later.
Looking at sales over the past few decades, one can see overall upward trend, and for those looking to maintain a long-term approach to real estate investment, new condos show strength, as inventory is expected to continue to tighten in future, and increase demand.
If you’re considering a new condo, there are many factors to consider. Talking with your lender and taking a long-term approach means you can buy now.