The Penthouse Queen has the latest scoop on everything you need to know about Toronto's Condo Market!
Toronto's condo market is finally in bloom, with sales and new listings thriving. However, last year's market faced challenges due to high borrowing costs and affordability concerns. The Toronto Regional Real Estate Board's Condo Market Report showed sales in Q4-2023 were down 3.4% annually, with 3,446 units sold. Despite the pandemic, sales were higher in Q2-2020. New listings surged by 29.3% annually, balancing the market and contributing to a slight price downturn. The average condo sale price in the Greater Toronto Area was $702,142 in Q4-2023.
Toronto's condo market is expected to change direction due to the Bank of Canada's anticipated rate cuts by mid-year. After maintaining 5% interest rates for five consecutive meetings, the BoC is expected to initiate these cuts, potentially influencing market dynamics and stimulating additional interest in home ownership. Lower rates are key to understanding buyer activity and are expected to boost demand for ownership housing.
Following a year of uncertainty due to aggressive rate hikes, buyers are shifting their expectations for potential purchases and the prospect of decreasing interest rates is instilling confidence among them. Spring is in the air as more units are being listed for sale, showings are increasing, and condo sales are up 7.2% from a year ago, according to the latest TRREB data. The stir in activity can be linked to the exceptionally warm weather Toronto has been experiencing recently, with viewing requests increasing by 42% just over the last month. Realtor Matthew Gravina also sees an increase in activity, with more people going and inspecting condos and pre-approvals up dramatically through January and February compared to the last six months of last year.
The BoC is closely monitoring interest rate decisions to determine borrowing costs. If the bank holds interest rates, stronger demand is expected in 2024. The strength of the condo market is expected to be correlated with interest rate changes. The BoC is cautious about dropping rates during the spring market, and if rates drop by the end of the year and into 2025, there will be a significant increase in condo transactions.
Buyers of condos should align with a condo sales expert and get pre-approved before searching the market. Sellers should also do their homework to ensure they are tapped into real-time market data and consider any work they can do to improve their offer. Selling a condo in Toronto has been spoiled in recent years, with agents relying on photos and a quick sale. Sellers should also consider if any work can be done on their unit to get a better price. As the spring market unfolds, the condo market will be closely monitored. According to Pearson, record population growth, a resilient economy, low unemployment, and declining mortgage rates in the second half of the year will result in increased home sales compared to 2023. This will be the start of a multi-year recovery as affordability challenges persist, and a rebound in the supply of homes.
