Condo sales set for resurgence after sluggish Q1 2023

In line with the general market trends, condominium unit sales and the average selling price were lower in the first quarter of 2023 compared to the same period in 2022. However, strong population growth, tight rental market conditions and improved first-time buying intentions will result in renewed growth in condo sales this year, according to the Toronto Regional Real Estate Board (TRREB).

There were 4,519 condominium apartment sales reported through TRREB’s MLS System in Q1 2023 – down by 42.9 per cent compared to 7,909 sales reported in Q1 2022. Over the same period, new listings were also down, but by a lesser annual rate of 19.9 per cent. This means that condo buyers did experience more choice compared to the first three months of 2022.

Temporary lull

“Higher borrowing costs caused a temporary lull in condo buying activity,” says TRREB President Paul Baron.

“However, recent Ipsos polling for TRREB suggests that first-time buying activity will pick up noticeably this year due, at least in part, to double-digit rent increases over the past two years. Despite increased interest rates, mortgage payments on a condo are now closer to the cost of renting for a lot of potential buyers. In addition, homeownership has the added benefits of equity growth and asset appreciation over the long term.”

The average price for condominium units sold in Q1 2023 was $700,566 – down 11.4 per cent compared to the average of $790,418 in Q1 2022. Approximately two-thirds of GTA condo sales took place in Toronto. The average selling price in Toronto was $726,664 in Q1 2023 – down by 10.3 per cent compared to the same period a year earlier.

Recovery leaders

“Housing market conditions have been tightening up in the GTA,” adds TRREB Chief Market Analyst Jason Mercer. “Home sales and selling prices are expected to improve as we move through 2023. Based on the expectation that first-time buying activity will increase this year, look for the condominium apartment segment to be one of the recovery leaders in terms of sales and price growth.”

In other TRREB news, Baron welcomes the recent decision by the City of Toronto to allow multiplexes to be built across the city.

“Toronto has a housing supply challenge and we desperately need to build more homes for families and singles if we are going to protect the Canadian dream of homeownership in our city for future generations,” he says.

Major step forward

“Council’s decision to permit multiplexes to be built across Toronto as-of-right is a major step forward in our city’s work to increase housing supply and improve housing affordability. It will effectively end exclusionary single-family zoning in Toronto, an archaic rule that has kept homeownership out of reach for young families and single individuals for too long.”

Legalizing multiplexes will empower the development community to build more gentle density housing types, such as townhomes, duplexes, triplexes and fourplexes – the kinds of homes that suit growing families, singles and new Canadians.

“We urge all mayoral candidates to endorse this important change and commit to keeping it in its current form should they get elected,” says Baron. “Toronto cannot afford to go backwards on housing supply and affordability. We must continue to build more homes so future generations have a fair shot at achieving the Canadian dream.”