So much for a bust. The country’s largest condominium market has seen a historic surge in the number of new condos completed and ready for sale this year, raising concerns about the potential for a sharp drop in prices in Toronto.
Those fears appear to be misplaced, at least for now, with the number of units trading hands spiking in line with the number of properties hitting the market.
The number of condos sold in the metro “416” region spiked 21.3 per cent last month compared to a year earlier, figures released by the Toronto Real Estate Board showed. In the suburbs, sales surged 25.2 per cent.
“[T] condo market is on fire,” BMO senior economist Sal Guatieri said.
The sharp rise wasn’t because investors or owners reduced prices, either. Prices were up an average of 6.3 per cent (reflecting a seven per cent rise in the metro area, and 4.6 per cent jump in the surrounding suburbs).
Guatieri suggests scorching price jumps for other forms of housing in the city are pushing buyers into condos, which carry an average price of $390,900 in the Greater Toronto Area. In contrast, the average price of a detached home in the region is more than double, at $816,600, and more than one-million dollars in the 416 metro region.
Detached homes in the inner city posted another “marked” jump of 14.2 per cent last month to an average of $1.05 million, a release from Toronto’s real estate board said. Semi-detached and townhouse properties similarly experienced double-digit gains.
The jump in condo sales in Toronto “come on the heels of a record month for Vancouver” as well, Guatieri said, far and away the country’s most expensive housing market.
“No doubt, galloping home prices in two of the least affordable cities in Canada have supported [condo] demand in these two regions,” the BMO economist said.