Condo buyers benefitting from more choice

Moving to home offices and seeking out more space all together left condo owners with a decision to make: Sell or stay. It’s certainly worth noting that there are currently a lot more condo sellers than buyers. In the latter half of 2020, the number of available condo listings soared. On the other hand, while condo sales remained strong, the pace of sales growth did not keep up with listings growth. This meant more choice and negotiating power for buyers and ultimately a moderate decline in average selling prices.

Record-low borrowing costs

Speaking of price, in the latter months of 2020, the average GTA condo price was down slightly to $610,044. In Toronto, the average selling price dropped at a slightly greater rate. Price declines were more notable for smaller units, for which there was a greater supply.

The increase in supply is partly the result of investors listing their units. Whether it’s the softening of traditional and short-term rental markets or the looming possibility of a vacancy tax, both point towards investors choosing to put their investment property up for sale. The same is true for those looking to rent a condo. Many investor rental units became available due to COVID-19’s impact on tourism and short-term rentals. Of course, another source of condo listings was owners selling their units to move into a different form of housing, likely taking advantage of record-low borrowing costs to do so.

Prominent story

While the prominent story has been the strong number of condos for sale over the last 12 months, demand for condos is still around. Condo sales in the latter half of 2020 was up substantially by nearly 21 per cent when compared to 2019. It’s also likely that we’ll see a pickup in condo demand, especially once global vaccinations increase and immigration into Canada, including the GTA, accelerates in conjunction with the country’s broader economic recovery plan. One thing is certain: Further economic recovery will help absorb supply in the ownership and rental markets beyond 2021.

On Feb. 8, the Toronto Regional Real Estate Board released its highly anticipated Market Year in Review and Outlook 2021 report. Inside you’ll find the 2020 market year unpacked and a look into what’s ahead for 2021, including insights on the condo market. Visit trreb.ca to download the report and to connect with a TRREB member.