Growth in new Condominium Apartment Listings Outstrip Growth in other Market Segments
“Generally speaking, market conditions remained very tight in the GTA resale market in August. Competition between buyers was especially strong for low-rise home types, leading to robust annual rates of price growth. However, with growth in condominium apartment listings well-outstripping condo sales growth, condo market conditions were comparatively more balanced, which was reflected in a slower pace of price growth in that segment.”
Jason Mercer (TRREB’s Chief Market Analyst)
Sales are up on a year-over-year basis for all major home types, both in the City of Toronto and surrounding GTA regions (http://www.trreb.ca/index.php/market-news/community-reports?utm_source=eblast&utm_medium=email&utm_campaign=Market-Watch_0409200 ). Reports indicate that the low-rise market segments, including detached and semi-detached houses and townhouses, were the drivers of sales growth. In addition, it was noted that fewer households have chosen to go on vacation as a result of COVID-19. Instead, they have remained in the GTA and been active in the housing market.
Both the number of new listings entered into TRREB’s MLS® System during the month and the number of active listings at the end of the August 2020 were up on a year-over-year basis. While new listings were up strongly for all home types, growth in new condominium apartment listings far outstripped growth in the other market segments.
Toronto Regional Real Estate Board (TRREB) President Lisa Patel announced that the strong rebound in Greater Toronto Area (GTA) home sales continued with a record result for the month of August. GTA REALTORS® reported 10,775 residential sales through TRREB’s MLS® System in August 2020 – up by 40.3 per cent compared to August 2019.
The MLS® Home Price Index Composite Benchmark was up by 11.1 per cent in August 2020 compared to August 2019. Over the same period, the overall average selling price was up by 20.1 per cent to $951,404. Annual detached and semi-detached sales growth was stronger in the comparatively more-expensive City of Toronto compared to the surrounding GTA regions. This helps explain why growth in the overall average selling price outstripped growth in the MLS® HPI Composite Benchmark.
“The condominium apartment market experienced a dip in sales and new listings in the second quarter of 2020, as many potential buyers moved to the side-lines as a result of public health measures taken to combat COVID-19 and the resulting economic downturn. With the overall housing market trending toward recovery in June, condo apartment sales will likely improve in the third quarter,”
President Lisa Patel (Toronto Regional Real Estate Board)
Buyers seem to be increasingly confident that somewhere, the perfect condo is available.
Condominium apartment sales were up on an annual basis for the second straight month but to a lesser degree. A look at the numbers will provide a better understanding. In the second quarter 2020 condominium apartment sales amounted to 3,459, down 50.8 per cent compared to 7,024 sales in Q2 2019. The number of new condominium apartment listings (8,717) in Q2 2020, was down 21.6% compared to new listings (11,114) entered in Q2 2019. The average selling price for condo apartments is up 5.1 per cent compared to Q2 2019.
Let’s understand why these shifts might be happening. Toronto Urban millennials, who are attempting to flee the city, are looking past areas like: Mississauga, Halton, or Durham, and are finding condos built in cities like Innisfil.
There is also this investor demand for condos. Investors are aware of the student-housing crunch in Toronto and Vancouver. This means that there is rental potential, and many may be investing in the Toronto market for that reason. Investors realize that if you can’t earn a profit on capital appreciation, you can still make it on rental income.
The highlighted features of Toronto condos is: their proximity to work, leisure, restaurants, shopping and freedom from that inconvenient commute that many Torontonians face each day. Oddly, the condo market in Toronto is much less volatile than the single housing and townhouse market in Toronto.
You have the power to build, grow, and protect your investments. If you are thinking about selling, or refinancing your home, Matrix Mortgage Global (https://www.matrixmortgageglobal.ca/) can offer you a variety of mortgage solutions to meet your specific financial needs. It will be important to watch the relationship between condominium apartment sales and new listings as we move through the second half of 2020. If economic recovery is sustained, the demand for condo apartments will improve.