The condominium apartment segment recorded some of the biggest increases in the GTA housing market throughout most of 2019. At the end of November, on a year-to-date basis, sales were up by 2.8 per cent, and the average price at $586,554 was up by $34,208 - a jump of 6.2 per cent - over the same period in 2018.
This growth trend will continue into 2020, gathering more steam. The recent Canada Mortgage and Housing Corporation’s (CMHC) Housing Market Outlook forecasts a rebound in activity in the GTA over the next couple of years, with condo apartments leading the way in sales and construction. A population influx, more jobs and lower interest rates will all boost buyer demand.
The report suggests that the condo market will see an above average price growth, with the demand for rental units remaining strong. “Anticipated increases in the millennial and senior populations alongside support from strong immigration inflows will ensure that the average vacancy rate remains tight and below 1.5 per cent over the forecast horizon,” reads the report. “Over the next few years however, private rental apartment supply will grow at their fastest pace since the early 90s as strong demand will encourage more developers to supply the market with more rental units.”
The GTA condo market, which is in sellers’ territory with a sales-to-listing ratio around 70 per cent, is experiencing a significant supply crunch especially in Toronto and the downtown cores of some 905 areas. According to Dana Senagama, CMHC’s principal market analyst for Toronto, “If we continue to see strong rental demand, immigration and rising house prices, there will be higher demand for condo apartments.” Senagama says condos have been the “saving grace” in Toronto’s high-priced housing market and remain a more affordable option for new homeowners. Single-detached homes average above the $1 million mark, while a townhouse nears $800,000 to $900,000 on average. Condos average around $500,000 for resale or $650,000 for a new unit. A dearth of purpose-built rental buildings, changing demographics, and soaring immigration will keep the vacancy rate low and rental demand steady.