Toronto condo market expected to boom this year after waning interest in 2021
The Greater Toronto Area condo market has endured a particularly rough couple of years, with demand for multi-unit housing like condominiums losing traction over single-family and townhomes that offer a bit more breathing room during pandemic conditions.
But experts think that things could change in 2022, forecasting a potential surge in condo demand that could be accompanied by skyrocketing prices.
And it's not hard to see why condos could see a big resurgence this year, with the average price of a condo in the city now at just over $743,000 versus the $1.43 million average needed to buy a semi-detached or $1.8 million for a detached house.
When it costs twice as much or more to own a house amid runaway prices, it's fair to assume buyers with less capital to invest will be bringing new demand to the condo market in 2022, and will fuel price appreciation accordingly.
Experts don't just predict a small change in the breakdown of home type demand, but a massive surge in condo sales relative to single-family homes.
This isn't just being chalked up to the disproportionate imbalance between condo and house prices, but also supply and demand issues, and the resulting buyer fatigue and missed opportunities.
Analyses like the Royal LePage Market Survey Forecast are predicting condo price growth to outpace single-family homes in 2022, signaling a big year for condos in the city.
The median price of a single-family detached property is expected to climb by 10 per cent to $1,564,200, while the average condominium is predicted to increase 12 per cent to $763,800 this year. Even though this prediction has condos outpacing single-family homes, that rate of growth is still below the 16 per cent increase in condo values recorded in 2021.
But what does all this projected growth in the condo market mean for the house market? Well, probably nothing promising from investors' point of view.
Condos and houses often trend in opposite directions, as was the case during the pandemic when demand for houses has surged at the expense of a stagnating condo market. An even more fitting example came in 2017 when condo values soared skyward and the price of detached houses was hit with a near-vertical descent.
One real estate agent claims that the two markets "are like yin and yang," and "tend to move cyclically, always chasing each other to find that new balance."
And with hundreds of development proposals tabled with city planners in 2021 alone, there could be plenty of new inventory on the way to meet this expected spike in demand.
Join the conversation Load comments