Although the number of sales is still very low, especially compared to last year, condo prices remain surprisingly resilient, as a new report on the housing market indicates.
In the fourth quarter of 2021 there were 5,321 condominium sales in the city of Toronto according to the Toronto Regional Real Estate Board (TRREB). In the fourth quarter of 2022, that figure dropped more than 50 per cent to 2,427. Despite the massive slowdown in sales, the average price stayed almost the same at $738, 398 a drop of less than $2,000.
“While condo market conditions have become more balanced over the past year, there has been enough demand relative to supply to support selling prices. On average, the condo market segment is the most affordable. 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 TRREB President Paul Baron.
The same price flatline occurred in most other areas close to the city of Toronto. The only significant price drops were further afield in Durham Region and beyond.
According to TRREB, total condo apartment sales amounted to 3,582 in Q4 2022 – down 54.1 per cent compared to Q4 2021. New listings were also down on a year-over-year basis by 14.3 per cent.
“Condo apartments remain an important segment of the market. They are the key entry point for many first-time buyers. Investor-owned condos are also an important source of rental supply in many parts of the GTA. As immigration into Canada continues at a record pace for the foreseeable future, the GTA will welcome many new households. This should see the demand for condos, in both the ownership and rental markets, strengthen moving forward,” said TRREB Chief Market Analyst Jason Mercer.
“Condo king” Brad Lamb, in a recent interview with StreetsofToronto, said he is expecting a market snapback should interest rates begin to fall.
“Predicting future events is what everyone wants to see, but it is impossible to know,” he said. “My prediction is that rates will start falling by mid-2023. If I am correct in that, once the Bank of Canada rate falls approximately 1.5 per cent (to 2.5 to 2.75 per cent), the market will surge back and quickly overshoot the previous peak.”