Condo sales in Toronto rise again thanks to people looking for bargain prices
Condos were the only housing type in Toronto that didn't see major growth in both sales and prices over the course of 2020, a year when Toronto became even less affordable in the face of a global health crisis.
With restrictions on travel and short-term rentals, the city saw fewer tourists, immigrants and international students, which in part caused condo supply to increase and rent and purchase prices to fall pretty drastically.
Buyers who had gotten into the market for investment purposes quickly tried to get out amid the financially unstable year, bringing tons of smaller units especially — the type favoured for Airbnbs — onto the market for cheaper than usual.
Thank the investors for jamming up the cost of living in Toronto, and the rest of the world. I hope the real estate market collapses and you all lose your retirement savings.
— The Cocktail (@astralnewt) November 4, 2020
As highrises continued to be slapped up at typical Toronto speeds over 2020, fewer people seemed to be buying them, with swaths of residents departing the downtown core for cheaper, more spacious suburbs now as work-from-home became the norm.
But, by December, it seems that the condo market had started making its recovery.
According to new data from the Toronto Regional Real Estate Board, last month marked record highs for home prices and real estate transactions in the city: the former up 13.5 per cent year-over-year to hit an average price of $929,699, and the latter up 64.5 per cent year-over-year to reach 7,180 residential sales.
What's perhaps most interesting is the bounce back of condo sales, a sector that experts had been encouraging buyers to get into while prices were relatively low.
And, it seemed that many prospective homeowners listened to that advice.
As noted by RBC Senior Economist Robert Hogue, "softer condo prices are now drawing more buyers in — existing condo sales soared virtually everywhere in December" after what he called a "subdued" year for the housing category.
While the average condo price in the GTA rose only slightly year-over-year in December, sales surged to 75 per cent more than December 2019, with more than 1.5 times the active listings.
This, to Hogue, signified that buyers "were out in full force looking for bargains" with a glut of units available in the $500,000s — the lowest they may be for some time.
Like other stakeholders, he believes that the market will continue to heat up into 2021, in part due to an affordability factor that will eventually diminish with such increased demand.
Toronto’s Condo Market (Condo prices Down 2% YoY) Sales up 75% ( Important to read! ):
— TORealEstateAgent (@torontowise) January 6, 2021
That shows the current buyer demand is absorbing standing inventory in the condo market. It gives a signal that in a month or two we’ll have the condo price up and multiple offers to start!!
With the rollout of the COVID vaccine and a return to something like normal this year, there surely won't be many bargains to be found in the Toronto housing market for long.
