GTA Condo Market Update 2018 – REMAX Report
Affordability is driving condo market share and prices to peak levels in the GTA in 2018
REMAX report reveals that resale condo apartments & townhomes now represent 37% of total residential sales in the GTA
GTA Condo Market Update 2018 – A Vertical Growth
What’s driving the growth of condo sales & where people are buying
Condominiums represent almost 37% of total residential sales, up from 30% in 2013
Affordability is primarily fueling the rise of condo sales. Resale condos is the only property segment that held up against the 2017 market correction. The average price of a condominium apartment increased almost 8% to $551,761 between January and October 2018, up from $512,552 during the same period in 2017. Townhomes were slightly ahead of last year at $571,058, compared to $568,165 in 2017. Prices of freehold properties, including single-detached, semi-detached, attached/row/townhouse, and linked townhomes are all down year-over-year.
In fact, in October 2018, the Teranet–National Bank National Composite House Price IndexTM was down 0.4% from the previous month. An October decline is not common, this was only the 4th in 20 years of index history. It was also the first index decline in 8 months.
For the first time since December 2014, the component indexes for 10 of the 11 metropolitan markets surveyed were down for the month of October, with the exception of Montreal continuing with seller’s market conditions. Toronto market was down −0.2%.
However, if we look at the October composite index from a year earlier, there was an increase of 2.8%. This is because last year the index fell abruptly in the months of August & September. Toronto market was up 1.9%.
“The condominium lifestyle continues to resonate with buyers in the Greater Toronto Area for a number of reasons. While the affordability aspect is first and foremost, we’ve also a seen strong investor presence in recent years,” as per senior RE/MAX personnel.
A recent report by Urbanation and CIBC found that investors who bought condos for the purpose of renting accounted for 48% of all newly completed units in the GTA in 2017. “The income potential, given today’s tight rental market, in addition to the overall return on investment, has been a serious draw for real estate investors.”
Immigration, population growth & lifestyle choices have also contributed to heightened demand for condo apartments and townhomes.
Aging infrastructure, combined with a lack of transportation alternatives, longer commute times and the environmental component—with efforts to reduce carbon footprint—have all played a role in buyers choosing condos in Toronto proper that are close to both work and play.
The most popular area for condo sales in Toronto remains in the downtown core, with one in every 5 condos (22%) sold in the area bordered by Bloor Street to the north, Lakeshore to the south, Don Valley Parkway to the east and Dovercourt Road in the west.
“In spite of a proliferation of condominium developments over the past decade, supply and demand issues continue to persist in the core. Limited inventory continues to place substantial upward pressure on prices, with fewer affordable housing options available—and that includes condominium rentals. We need to create more affordable GTA housing options that can accommodate buyers and renters at every price point.”
At present, almost 51% of condo sales in the GTA occur under the $500,000 price point, but affordability is being threatened as builders and developers face skyrocketing construction costs and a land crunch within the GTA.
As per TREB/ Ipsos survey results, a vast majority of young people in the GTA are concerned about home ownership. Nearly 92% of respondents agreed that the goal of home ownership is becoming more difficult for younger people in the city. With these insights in mind, it makes sense that relatively more affordable home ownership alternatives like condo apartments have been very popular with home buyers over the past year.
Mississauga is the GTA’s second most popular destination for condominium living, accounting for 14% of condo sales so far this year.
Below charts represent key highlights from TREB’s 2018 Q3 Condo Market Report.
- Highest sales reported in the $400,000 – $499,999 price range
- Highest sales reported for 1 BR + Den suite types
- 2 BR suites are gaining popularity, as condos are the most affordable options for first time buyers
View various condominium apartment buildings in Mississauga sorted for your convenience by age of building, amenities, top 10 condo buildings, builder new condos & more in our Mississauga Condo Profiles.
View Resale & New Square One Condos for Sale.
Top 5 Reasons Condo Ownership Rocks
Top #1 reason: Affordability
The average price of a condo in Toronto was $615,582. The price has increased almost 12% year-over-year, but it’s still a far cry from an average price of a detached house at $1,342,363.
In Mississauga, the average price of a condo in Oct 2018 to date is $442,007. The price has increased by approx. 12 % from same time period in 2017. The average price of a detached house in Mississauga is $1,041,485 in Oct 2018.
Reason # 2: Location is Everything!
Condos have typically have a hub and a mainstay in every downtown core. The comprise of living in a smaller-sized home (condo) is considered well worth the trade-off when it comes to convenience of condominium amenities and local attractions and facilities.
Due to urban sprawl and high prices of urban homes, condos are becoming popular in suburbs as well, close to transit, shopping, hospitals and other services that make them a great alternative to traditional single-family homes even in the suburbs.
Reason # 3: Convenience
This is a big driver to condo popularity among first time buyers and downsizers. First, there’s the maintenance factor to consider. While some people enjoy all the maintenance that comes with home ownership. But for those who don’t have the time, ability or inclination for regular maintenance, a condo is their dream home. A part of the monthly condo fee goes to providing the above services to condo owners. This makes condos ideal for busy professionals, jet-setters, snow birds, the young and old alike.
Reason # 4: Amenities
With condos gaining popularity, many developers are including five-star level services to make condo living even more attractive for the residents. Concierge service, spa, salon, massage, gym, fitness classes, pool, hot tub, sauna, games room, party room, board room, library, theatre, guest suites are some of the features that make one condo building different or more desirable than another. The monthly condo fees will vary based on the size of the condo suite, plus age and amenities offered in the condo building.
Reason # 5: Income Generation
Investors have always sought out small condos in urban centres as great money-makers. Downtown Toronto & more recently Mississauga City Centre have been top choices for our investor clients. Investing makes sense if you plan to hold the property over the long-term, you can rent it to a tenant & use the rental income to pay off the mortgage. Not only can one own a downtown property for own use at some point or sell it for profit, or continue earning by renting it out. Investing in Mississauga condos makes sense as it benefits from: Low vacancy rates, Steady population growth, New infrastructure developments, Public transit & connectivity.
- About 25,000 condo townhomes & apartments have changed hands in the GTA between Jan & Oct 2018
- Condo buyers in move-up segments are active, with sales between $500K & $700K up 3% from last year
- YTD sales of luxury condo apartments & townhomes over the $2 million price point are 2% ahead of last year
Note: This GTA Condo Market Update 2018 is based on & uses excerpts from REMAX 2018 Reports & Posts.
Team Amit Kalia is Your Trusted & Local Square One Condos Realtor Team