Condos continue to provide affordable option for new-home buyers
Greater Toronto Area realtors reported 4,731 condominium apartment sales through TREB’s MLS System in the first quarter of 2019. This means results were down by 6.8 per cent compared to Q1 of 2018.
As for new condominium apartment, listings were up by 2.4 per cent compared to Q1 2018, with 8,222 listings added in 2019 versus 8,029 listings added in the first three months of 2018.
I’d like to say that while we experienced a slightly better-supplied condo market in the first quarter of 2019, the market segment remained tight enough to retain the highest year-over-year rate of price growth compared to other major home types. Condos continue to provide prospective buyers with a relatively affordable housing option in the GTA, especially given the impact of the OSFI-mandated mortgage stress test.
The average price of a condominium apartment increased by 4.5 per cent from $533,520 in Q1 2018 to $557,377 in Q1 2019. Year-over-year price growth in the city of Toronto, which accounted for 69 per cent of transactions, was slightly higher at 5.4 per cent, resulting in an average price of $603,243.
The completion of new condominium apartment projects can certainly influence both the ownership and rental segments when it comes to the condo market. According to CMHC, condo apartment completions were up substantially year-over-year in the fourth quarter of 2018, which could account for an uptick in condo ownership and rental listings in Q1 2019. Conversely, condo apartment completions were down year-over-year in Q1 2019, which could arguably impact listings in the opposite manner over the next three months.
The condominium apartment rental market remained very tight through the first three months of 2019. Average one- and two-bedroom rents were up well above the rate of inflation on a year-over-year basis in the first quarter. However, the condo rental market also benefited from an increase in the number of units listed, resulting in more choice for prospective renters. However, we would need to see a number of quarters with listings growth outstripping rental transaction growth in order for the market to become more balanced.
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Garry Bhaura is president of the Toronto Real Estate Board, a professional association that represents 48,000 professional realtor members in the Greater Toronto Area. You can contact him At Trebpres@trebnet.com. For updates on the real estate market, visit Trebhome.com. If commercial property is what interests you, contact a TREB realtor by visiting trebcommercial.com.