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Toronto's Condo Market Still Hot
Condominium sales in the Greater Toronto Area are so hot right now that one unit is being sold every four minutes that sales offices are open.
The condo craze is showing no signs of slowing down. Recent data shows that high-rise sales have jumped 41% in the past year while low-rise (townhouses, semi-detached, single detached) sales have dropped 28%.
One of the most telling figures about how strong the condo market is that six out of every 10 new homes sold in the GTA are high-rise suites, according to RealNet Canada Inc., a real estate information services firm. "Frankly, we never thought we'd see the day when low-rise product would represent the minority of our sales, particularly to this extent," says Desi Auciello, president of the Greater Toronto Home Builders' Association.
The previous high-rise sales record was 46% while last year's annual average was 42%.
What's fueling this record pace? Single family homes are getting costlier and more people are turning to condos. "As house prices rise," Auciello says, "home buyers seeking a toehold in the market are obviously turning in increasing numbers to the condo market."
- According to the RealNet new home price index, the average price for high-rise condos was $314,370, about $80,000 less than low-rise properties that go for $393,398. The index is about the average asking price for all the remaining new condos and homes available for sale, excluding ultra-luxury properties.
- High-rise sales were highest in Toronto where they jumped 44% to 1,652 units. Peel was second highest and also the biggest percentage gainer as sales there surged 331% to 474 units.
An increase in land prices is also becoming an issue for low-rise properties, making them more expensive to build.
As a result, condominium construction is also on the rise and at a new record high. Year-to-date starts have jumped nearly 18%, according to recent data. Most of the starts were in Toronto and Mississauga.
The most expensive area to buy a condo in the GTA is the Annex/Yorkville area. Average values there have jumped 16% to $516,729 over the past year.
Despite the surging popularity and rising prices, the Bank of Canada doesn't believe the condo market is a bubble waiting to burst. In a recent report, it states that appears to be excess supply in Montreal and Edmonton, but not so in Toronto, Vancouver of Calgary. There are also few signs of speculative investing in Toronto's condo market.
The central bank says while there is a possibility of some downward pressure on prices in the condominium market, the risk of a crash appears limited.
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