15 Jul The Latest Update on the Toronto Condo Market – Want to Know What’s Happening?
I had the pleasure of attending a seminar about the Toronto condo market hosted by Urbanation, a company that has, for the past 30 years, been tracking Toronto’s high-rise market.
Despite many media comments that the condo market was going to burst, reports from Urbanation actually point to more of a rebalancing. Here are some key points followed by a more detailed report from Urbanation:
Where new sales once dominated, there is now a rebalancing between new and resale. Part of this could be because new condo sales prices were in some cases higher than resale and after the 2008 correction and uncertainty, buyers preferred to invest in something that was already built (more stable) and more affordable.
I often hear “There are so many condos being built – isn’t that risky?”
Here are some basic facts:
- There are approximately 150K people that come/move to Toronto each year.
- We don’t really build “rental” buildings anymore.
- Many head offices are choosing to relocate back downtown because people are tired of the commute to the ‘burbs.
For the factors listed above and many others we need places for people to live.
In order for a condo project to be built a minimum of 70% of the units must be sold. Which means any of the projects that we see around the city have mostly been sold.
What we have also noticed is that many of these new units are not coming up for sale once they are complete (a concern by many that investors would just want to flip their purchases and crash the market) but instead they are being held for rental purposes.
In fact we have seen an increase in rental activity and the demand is keeping up with the supply (rentals make up 26% of the available condo unit supply), which has also lead to an increase in rental rates.
In my opinion, our rental market is still very affordable compared to other cities like New York and London. But I suspect as our inventory levels continue to lower we can expect to see rental rates rise even more.
What are the top rental areas in the GTA? Check them out below:
So what kind of condo should you buy?
Ultimately that will depend on your end use. Are you physically moving into the property or will it be an investment?
It’s no secret that condos are getting smaller and smaller, in fact there is a new project being launched at Queen and University that is rumoured to have a 560sq/ft 2 bed condo. So from an end user perspective I believe “space” will always be in demand. Both from an “upsize” and “downsize” buyer’s perspective, Urbanation also found that demand in older condo buildings is rising because older buildings generally have larger suites.
Obviously picking the right condo is more complicated than just buying size, so if you would like to discuss some other factors I would be happy to help. Likewise if you have any other questions on what is happening in the Toronto condo market – just let me know.
To view the complete presentation, click here.