GREATER TORONTO – The scarcity of inventory that has long characterized the GTA’s detached real estate market may have finally caught up to its condo market, according to new numbers released by the Toronto Real Estate Board (TREB).
Issued October 24, the Board’s quarterly Condo Market Report revealed that condo apartment listings were down by 13.3 per cent, year-over-year, in Q3 (July through September). Buyer activity was not to blame, however, as condo apartment sales activity shot up by 22.1 per cent year-over-year, totaling an impressive 8,014 transactions for the quarter.
According to TREB president Larry Cerqua, declining GTA condo listings may be more closely related to the region’s decelerating pace of condo construction.
“The completion of new units was down substantially during the first three quarters of 2016 compared to the same period in 2015,” Cerqua explained.
“This arguably played a role in the decline in new condominium apartment listings.”
The decline in listings contributed, amongst many other factors, to a 9.6 increase (year-over-year) in the average price of a GTA condo – which rose to $415,643 in Q3. During the same quarter, last year, the average condo would cost a buyer $379,322 – nearly $50,000 less.
“The annual rate of condominium apartment price growth has accelerated over the past year as the supply of units available for sale became more constrained while demand remained strong,” said Jason Mercer, TREB’s Director of Market Analysis.
“With this said, however, annual rates of price growth remain well-below those for low-rise home types. Condo apartments continue to be an affordable entry point into home ownership for first-time buyers.”
Of all condo types, the biggest seller for Q3 was two-bedroom suites, which comprised 32 per cent of all transactions.
Regional trends to watch
- Of all the regions monitored by TREB, the one that saw the biggest Q3 increase in condo values was Durham Region – where the average price soared from just $266,111 in 2015, to $323,148 in 2016.
- York Region, on the other hand, had one of the most impressive increases in sales – recording a jump from 655 transactions in Q3 2015, to 882 last quarter.
Uptick in condo rental rates
Condo investors will likely be pleased with Q3’s average condo rents, which reflected increases of 7.9 per cent (year over year) to $2,419 for two-bedroom suites, and 7.2 per cent (to $1,777) for one-bedroom suites.
The increased rents were likely connected to a downward trend in vacancies, as Q3 found the number of GTA condos listed for rent down by 17.3 per cent year-over-year.