The latest market report from the Toronto Regional Real Estate Board echoes a familiar refrain we’ve been hearing for months — sales are way way down, and as a result, prices continue to increase, albeit more slowly.
TRREB is a not-for-profit association of registered real estate brokers and salespeople, which tracks the market through its MLS system.
According to TRREB, condominium apartment sales are down approximately 46 per cent when compared to a year ago. And, although it suggests there is more balance in the market relative to last year, the average selling price of a condo is still up 4.5 per cent to $720,132 when compared to $689,230 reported for Q3 2021. “In the City of Toronto, the average selling price was $749,375 – up 3.3 per cent,” the report details.
“The condo market remains a very important segment in the GTA housing market, both in terms of ownership and rental. The ownership side of the market has been slower, as some first-time buyers have been sidelined by higher borrowing costs and the hit on affordability,” said TRREB President Kevin Crigger. “Many of these would-be buyers have shifted to the condo rental market in the short-to-medium term to meet their housing needs.”
Although the Bank of Canada’s raising interest rates multiple times in 2022 was a measure designed to combat inflation and make homes more affordable, it appears to not be working. Higher costs of borrowing are making the dream of home ownership even more difficult for people in the Greater Toronto Area and are even making the mortgages of current homeowners much more difficult to carry.
“The pace of condo price growth has moderated as higher borrowing costs have hampered affordability since the spring,” said TRREB Chief Market Analyst Jason Mercer. “However, the impact has been mitigated to a certain degree by a dip in listings over the same period. A shorter supply of condos will likely provide some support for prices in the months ahead.”
Not only are potential home buyers, and current homeowners feeling the pinch, but so are renters. As a result of a lack of supply on the market, as well as a steady stream of immigrants making their new homes in the GTA, people are turning to condominium rentals in droves resulting in double-digit increases.
According to TRREB, “the average one-bedroom condominium apartment rent in Q3 2022 was up by 20.4 per cent year-over-year to $2,481. The average two-bedroom apartment rent at 3,184 was up by 14.5 per cent compared to the same period in 2021.”
“Immigration into the GTA plus non-permanent migration for school and temporary employment have all picked up markedly. Add to this the impact of higher borrowing costs on the ownership market and it becomes clear that the demand for rental housing remains strong for the foreseeable future. Investor-owned condos have been an important component of the rental stock for more than a decade. However, the decline in rental listings over the past year is a further warning sign to policymakers that the overall lack of housing in the region extends to the rental market as well,” said TRREB President, Kevin Crigger.