The GTA’s condominium apartment sales increased in the year’s first quarter to 4,747, compared to the same period of 2023 and up 5.3 per cent year-over-year, the Toronto Regional Real Estate Board (TRREB) reports. Plus, new condominium listings increased by 23 per cent during this time.
All in all, buyers had more choice as average prices crept down.
‘Many renter households will have no more patience for rent increases before they consider purchasing’
“TRREB’s consumer polling, conducted by Ipsos, suggests that many renter households will have no more patience for rent increases before they consider purchasing their first home. Once interest rates start trending lower, look for condominium sales to pick up as more first-time buyers enter the market,” says TRREB’s president, Jennifer Pearce.
That said, the board also reported a 19.7 per cent year-over-year increase in condominium apartment rental transactions in Q1 2024 (to 12,541). The average rent for a one-bedroom condominium apartment dipped by 1.2 per cent to $2,441 during the same period, while the average two-bedroom rent remained unchanged at $3,139.
Prices largely stayed flat
The quarter’s average condominium apartment selling price in the GTA was $693,754, one per cent less than it was in Q1 2023.
The City of Toronto accounted for nearly two-thirds of total condominium sales and saw an average selling price of $723,186, which was 0.5 per cent less than in Q1 2023.
Source: TRREB
“As first-time buying activity increases with lower borrowing costs later this year and into 2025, inventory will be absorbed and market conditions will tighten. Increased competition between condominium buyers will result in upward pressure on selling prices,” says TRREB’s chief market analyst, Jason Mercer.
Where are most of the region’s condominiums selling?
Wahi reports that four of the 10 best-selling condominium buildings in GTA neighbourhoods were located in the City of Toronto, and three were in Vaughan. Mississauga, Milton and Richmond Hill each had one building represented.
“The best-selling Toronto condominiums show there’s still strong demand for condos depending on the location,” says Wahi CEO Benjy Katchen.
Top sales-to-units buildings
Notably, buildings with the highest sales-to-units ratios were often completed within the past decade.
Wahi reports that three buildings had sales-to-units ratios above nine per cent: Hawthorne South Village Condos, a 213-unit mid-rise building in Milton at 9.86 per cent, Bianca Condos, a nine-storey building in Toronto’s Annex neighbourhood at 9.72 per cent and 9085 Jane Street within Park Avenue Place Towers at 9.47 per cent.
Why now’s a great time to buy a condominium
Pouyan Safapour, president of Toronto developer Devron, believes that now is the best time to buy in the condominium market. He says that although 2024 has seen a slowdown in pre-construction sales, influenced by record-high interest rates and an influx of completed units from the past three to four years, a market shift is imminent thanks to interest rates projected to decrease later in the year along with a historic population increase.
“This shift will likely result in increased sales and pricing across all projects, as lower interest rates and depleting inventory continue to drive up demand. I agree with economists like Benjamin Tal who are predicting a sharp increase in condo pricing in 2025. This presents a unique window of opportunity for buyers to make their move now, before the market undergoes this transformation.”
The call to developers
Safapour feels there’s an interesting and much needed shift in the market towards a “flight to quality and value,” with more discerning buyers who prioritize quality and value over speculative purchases. “Projects offering exceptional quality and location continue to hold value, while those lacking in these aspects face challenges,” he notes.
“As developers, it’s our responsibility to cater to the evolving needs of Torontonians by creating homes that are not only of superior quality but also meet the diverse requirements of end-users.” He says that as an industry, developers must collectively elevate standards to meet the maturing expectations of buyers.
Keep in mind though that these comments are from Developers who have a vested interest in seeing sales pick up. If the cost to purchase and hold the property is higher than the revenue one can attain from the property, then the purchase only makes sense if you expect capital appreciation. However in this environment with so many condos not selling (often becoming rentals instead), it is hard to see condos appreciating any time soon. As more and more condos become rentals as owners are disenfranchised with the sale price, that will draw rents down as supply increases. In turn, this will exasperate the value proposition these high-rise condos offer. The overarching issue here is that developers are greedy, making inferior small units that families don’t want and then charging huge prices for inferior projects. People want family homes or would be open to condo high rises if they were larger and could accommodate families but that would impede the developer’s potential to make record profits. I understand developers have a lot of overhead but I am skeptical it is as high as they indicate. One of the main expenses that could be mitigated would be the high lending fees charged by lenders to make these high rises. However, I am skeptical that the developers would pass on these savings to the consumer and not just increase their profit margins… so getting lenders to cut their rates for the development of these high-rise options may not be the right solution. Overall I think developers and lenders need to see way more government oversite to ensure both are not gauging the little man as a means of creating record profits.
Not true. Most expense is government costs including HST which is over 30% of the total costs. Federal government has not increased HST rebate capped at 450k since inception 30 years ago. All new condos start over 450k.now. Fed should atleast double rebate to 900k.
Nick, are you a developer? HST is proportionate to the sale price and always has been. The increase in the sale price is because of the developers and the builders, and of course, the HST is increased proportionally. We can ask the government to cut out their share of the profits which I am all for, but my concern is that the developers will just pocket the savings in the same manner that they would most likely pocket any decreases in borrowing costs incurred to build the homes. The government needs to demand land be used and if not they need to pay a higher tax on vacant land. That would motivate the builders to stop holding onto the land until prices rise back to their desired profit levels. Furthermore, the government needs to mandate high rises be designed with a minimum number of bedrooms and sq footage to accommodate families.. eg: 50% of the building must be 3 bedrooms and over 1200 sq ft. If they want us living in high rises then they need to design them for families like they are in Europe. Sure the developers will charge a lot for 3 bedrooms but as time passes they will be sitting on a lot of 3 bedroom inventory which they will start to have to drop the prices to sell them off. Also, don’t allow the developers to hold on to rentals. if they sit vacant they need to pay a higher property tax… motivate them to drop their prices to sustainable levels. Developers and builders are taking advantage of the housing shortfalls to create inferior products not designed for the families of the future and then charge a ton ensuring high profits. If the government wants to drop the HST then ensure that money is all paid directly back to the consumer post-closing via the lawyers.