Toronto condos – whether rental or ownership stock – are becoming less affordable for the average Torontonian, according to fresh numbers from the Toronto Real Estate Board.
High-rise dwellings are seeing a sustained surge in popularity, reveals TREB’s second quarter condo and rental reports, while tight supply pushes purchasing and rental prices ever higher.
Average Toronto Condo Price Hits Half a Million Dollars
Condo prices have shot up 28.11 per cent year over year to an average of $532,032 across the TREB region (and slightly higher, to $566,513, in the city proper), despite an 8 per cent decline in sales between April and June. Meanwhile, new listings increased by just 0.7 per cent – barely a blip compared to the flood of detached homes that came to market following the implementation of the Fair Housing Plan in April.
“Despite the recent dip in overall GTA home sales, the condominium market was quite resilient, especially when compared to low-rise market segments,” said Tim Syrianos, TREB president. “Condo apartment sales accounted for a greater share of overall transactions during the spring compared to the same period last year. Market conditions have also remained tight, which resulted in the continuation of strong annual rates of price growth.”
Jason Mercer, TREB’s director of market analysis, said that condos will continue to be a top choice among GTA buyers; despite softening market conditions, low-rise and detached home prices are still well out of reach for many. The mortgage stress test put in place for borrowers paying less than 20 per cent down on their homes has also restricted many would-be buyers from higher-priced homes.
“This makes sense given that many households, especially first-time buyers looking to live in the City of Toronto, have turned their attention in increasing numbers to less expensive forms of ownership housing,” he said.
Fair Housing Plan Rent Rules Contradictory: TREB
However, while some buyers are finding less expensive options within high-rise options, renters aren’t so lucky. TREB finds that, despite new rules designed to cap the cost of rising rents in Toronto, rates rose by 8.8 per cent to an average of $1,861 for one-bedroom units, and up 8.7 per cent to $2,533 for two-bedroom units.
“It is clear that we continue to suffer from a lack of available rental units,” said Syrianos. “The Fair Housing Plan announced by the Government of Ontario committed to measures designed to increase housing supply. Conversely, the Fair Housing Plan also expanded rent controls which could preclude investment in rental properties, thereby further constricting supply. With different policy components potentially at odds, it will be interesting to see the eventual impact of the Fair Housing Plan on the rental market in the GTA.”
Mercer adds that not only have prices rose faster than the pace of inflation, but competition between renters has only heated up over the quarter. “…generally speaking, it has become harder to find a place to rent this year compared to last,” he said.
