Toronto's unbreakable condo market

I've been following the Toronto condo market in minute detail for over a decade, and every few years another obstacle is put in front of it. In every instance, the market has triumphed or overcome these impediments.

In late 2008 and into 2009, housing markets across North America were being ravaged by the turmoil associated with the global economic meltdown that was occurring. The biggest annual price decline experienced by the Toronto CMA resale condo market during that stretch was 1.7 per cent (index prices per Urbanation Inc). By comparison, Las Vegas resale prices fell by 32.9 per cent year-over-year in December 2008 and Phoenix prices dropped 33.9 per cent!

The Toronto condo market survived the introduction of Harmonized Sales Tax, a new land transfer tax, several mortgage rule changes and daily negative headlines, and it’s still going strong. I was certainly worried going into 2014 as new condominium sales in 2013 were at their lowest level since 2004 according to highrise market research firm Urbanation. Even that data reality did not act as Kryptonite, as the GTA condo market in 2014 will likely reach approximately 22,000 new sales when the data is finally tabulated – close to the second-best year ever!

According to RealNet Canada, there were more than 22,181 new highrise condominiums completed in the GTA between January and November of 2014 – an increase of 36 per cent annually. This “glut” of supply was supposed to increase the completed and unabsorbed supply, but no, that has decreased 15 per cent from November 2013 (per Canada Mortgage and Housing Corp.). In addition, new and resale prices are up, rents for investor held condos are up, and condo rental transactions are way up (per Urbanation and the Toronto Real Estate Board). Once again the bearish narrative has been proven wrong.

It’s about time you ignored the headlines and concentrated on the fact that the Toronto condo market has been strong for about 17 years! So if you’re waiting for a market correction, be prepared to potentially sit on the sidelines for another 17 years. Make 2015 the year you buy your first condominium or invest in real estate for the first time, but have realistic long-term goals in mind.

Forget about being a quick-flipper or a renovation renegade. Check out some of the great new projects at Fortress Real Developments or if you’re more interested in being a passive real estate investor, I would recommend you check out Fortress Real Capital.

Happy New Year and happy condo hunting in 2015.