The Greater Toronto real estate downturn has only had a limited impact on the condo market. That was the view in the condo market report shared by the Toronto Regional Real Estate Board (TRREB). In general, easing inventory and higher interest rates have resulted in relatively stable prices. The market is also significantly better supplied than it was pre-pandemic, though investors captured a much bigger share of ownership.
Greater Toronto Condo Prices Are Flat—It Doesn’t Matter How It’s Measured
Greater Toronto condo sale prices were flat over the past year, which is better than other segments. The average sale price fell to $710,500 in Q4 2022, down 1.3% (-$9,600) from the previous quarter. Compared to last year though, it was virtually unchanged—just a few dollars off.
Greater Toronto Condo Price Growth Is Cooling
The average sale price of a condo apartment across Greater Toronto.
Source: TRREB; Better Dwelling.
The less volatile benchmark price also showed flat movements across TRREB. The condo benchmark fell to $703,000 in December, once again virtually unchanged and just a few bucks off. Not the boom many were hoping for, but at the same time prices are faring better than single-family homes.
Toronto Condos Just Had One of The Worst Q4s For Sales Ever
Not a lot happening in terms of price, but Greater Toronto condo sales are softening. There were just 3,572 condos sold in Q4 2022, down 54.1% compared to a year before. It was the weakest volume for the quarter going back at least a decade.
Greater Toronto Condos Had The Worst Q4 Sales In At Least A Decade
The number of Greater Toronto condo apartments units sold through the MLS in the fourth quarter.
Source: TRREB; Better Dwelling.
Toronto Condo Inventory Is More Robust Than Pre-Pandemic
At the same time, inventory pressures are beginning to ease. There were 7,509 new listings for condo apartments in Q4 2022, a drop of 14.3% compared to the prior year. Despite falling in volume, it fell less than sales which reduces inventory pressure. There were also more new listings seen in the same quarter in 2019 or 2018.
Active listings, those remaining at the end of the period, also saw a big improvement. There were 3,430 active listings in Q4 2022, an increase of 130.5% from the prior year. It was also more than double the volume seen in the same quarter in 2019, when sales volume was also much weaker. In short, all signs point to this market being better supplied for buyers than pre-pandemic, though with much higher prices.
Greater Toronto Condo Inventory Is Improving
The number of active listings for Greater Toronto condo apartments in the fourth quarter.
Source: TRREB; Better Dwelling.
The Board Attributes The Resilience of Condo Prices To A Balanced Market
The board attributed the relative resilience of condo prices to a more balanced market. They explained the segment is more affordable, therefore has more demand.
“Therefore, it makes sense that we didn’t see the same type of price adjustment, in the face of higher borrowing costs, compared to other more expensive segments like detached homes,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron.
What kind of demand is back stopping this market? Well, investors make up a big portion of it.
Toronto Condos Are Being Scooped Up By Investors, Vacancies Better Than Pre-Pandemic
TRREB shared CMHC data showing the share of condos owned by investors surged. An estimated 37.7% of condo apartments in the City of Toronto were rental units in Q4 2022. This is up significantly from the 33.4% reported in the same quarter, back in 2021. Not a surprise, since most new condo construction (58.7%) is investor owned in Greater Toronto.
Investors Captured A Record Share of Toronto’s Condo Market
The share of City of Toronto condo apartments in rental.
Source: TRREB; CMHC; Better Dwelling.
There’s good news and bad news when it comes to how much of this inventory is available. On one hand, the vacancy of condo apartments for rent reached 1.6% in Q4 2022. That’s a decline of 0.1 points compared to a year before. Many attribute the drop to soaring rents, but in reality the vacancy rate was less than half that in 2019 and prices didn’t quite pop like this. This is a matter of lofty expectations.
Toronto Condo Vacancies Are Still Higher Than Usual
The share of City of Toronto condo apartments for rental that are currently vacant.
Source: TRREB; CMHC; Better Dwelling.
The latest TRREB condo market report shows a relatively stable market with flat prices, softening sales, and more balanced supply & demand. Overall, the market is better supplied than pre-pandemic, though prices seem to be sticky despite weaker buying.
I hope they all lose their shirts
Jealous much dude? Why would you want people to lose their shirts Dave??
There is a standoff between potential sellers, who think they’re going to outwait the Fed/BoC inflation fight; and the potential buyers who have zero appetite for overpaying, with even cash buyers pulling back massively, though they’re not dependent on mortgage rates. As always, homes that are priced right are selling just fine, but “priced right” means priced down there where the potential buyers are, and there are plenty of them, but they are several floors further down. And as potential sellers figure this out, their homes are going to sell.
yes, blackrock moved to your city. Let’s keep our heads bowed down and let them and similar others scoop everything.
Canada Real Estate is for Investors, Money Launderers and Tax Evaders.
Poor taxpayers are forced to rent. What will they do when the Rent becomes more than 100% of Income.
Good question.