Toronto Condo Market Performance 2023

Is the Toronto condo market feeling the effects of higher interest rates?

If you’ve walked around Toronto lately, you’ve likely seen construction cranes dotting the skyline, especially in busy areas like midtown Toronto and Downtown Toronto Waterfront community near the lake. Despite the visible construction, the demand for condos hasn’t been as strong as for detached homes and townhouses, and the price growth hasn’t been as impressive compared to the broader Toronto real estate market.

In one of our recent blog posts, we had  presented highlights from the RE/MAX 2023 Condominium Report, which also touched upon the challenges faced by the overall condo market. This is not so much of a good news. But the good news is that now is a great time to snap up good deals!

So, what’s going on in the condo market in the major urban center, and what can we expect in 2024?

Present Situation of the Toronto Condo Market

Toronto condos are attracting more interest than detached properties and townhomes, but their prices aren’t rising as quickly. In October, condo sales in the 416 area increased by 0.2%, totaling 883 units. However, the average price for a Toronto condo in the 416 area dropped nearly two percent to $729,160. In November, the average price dropped to $720,280 from 825 sales.

In comparison, sales for detached homes in Toronto fell by 1.5%, but prices surged more than eight percent to nearly $1.719 million. However, in November, the average price dropped to $1,617,918.

It’s been a challenging year for condominiums overall. New condo sales in Toronto have dropped by 47% year-to-date in 2023, reaching the lowest levels in about a decade.

Downtown Toronto Condos Average Prices
November 2023December 2023
1 BR$625K$637K (1.92%)
2 BR$946K$950K (0.42%)
3 BR$1.78M$1.36M (-23.6%)

What is the state of the Mississauga Condo Market?

In our opinion, Mississauga, especially City Centre condos, popularly known as Square One presents an excellent opportunity to buy or invest in condos in the present market, before it sees recovery in the coming months.

2 BR + 2 WR units are fast gaining popularity and demand.

Mississauga Condos Average Prices
November 2023December 2023
1 BR$551K$581K (-3.63%)
2 BR$685K$649K (-5.26%)
3 BR$801K$799K (-0.25%)

According to TRREB, “The condominium apartment market is an important entry point into home ownership for first-time buyers. A better-supplied market has led to more choice for these buyers, resulting in more negotiation power and lower selling prices on average. A pause in price growth has helped mitigate the impact of higher monthly mortgage payments.”

Outlook for the Toronto Condo Market in 2024

With the GTA population growing rapidly, current holding of policy rate by Bank of Canada, there’s a hopeful consensus that borrowing costs might see some relief in 2024 and more in 2025.

Economists, including Benjamin Tal and Katherine Judge from CIBC, caution that the Canadian housing market is softening and approaching “recessionary territory.” Condo projects in the GTA are facing challenges due to elevated interest rates and market uncertainty, with some temporarily halted.

The iconic Toronto condo project, The One, at Yonge and Bloor, faced financial difficulties, leading to receivership in October. This high-profile skyscraper, originally an 80-storey proposal, encountered various challenges from a deal with Apple Store falling through to pandemic-induced cost overruns.

However, economists don’t anticipate widespread issues for the Toronto condo market, thanks to expected rate cuts by the Bank of Canada and increased demand from higher immigration levels.

What is the state of the overall GTA Housing Market?

The housing market in the City of Toronto is experiencing a significant slowdown, with home prices and sales dropping notably. The average selling price in the city is now $1,051,180, reflecting a substantial 7% decrease compared to the previous month. Year-over-year, home prices in the City of Toronto remain essentially unchanged. Home sales in Toronto, totaling 1,607 in November 2023, have declined by 12.5% monthly and 11% year-over-year.

In the York Region, encompassing cities like Aurora, Markham, Vaughan, and Richmond Hill, the average selling price is $1,286,617, showing a 0.5% decrease month-over-month and a 2% decrease year-over-year. The Durham Region, including areas such as Ajax, Whitby, Oshawa, and Clarington, has an average price of $883,115, reflecting a 1% year-over-year decrease.

Oshawa’s housing market has experienced a notable 6% decrease in prices month-over-month, now at $755,926. In Brampton, there is a slight 0.3% monthly increase in prices, surpassing the $1 million mark at $1,002,482, with minimal year-over-year change. Conversely, the housing market in Mississauga has seen a significant 10% monthly decrease in prices, now at $993,352, down 3% year-over-year.

What does this mean for Your Real Estate Goals in 2024

Read our GTA Real Estate Outlook 2024 blog post, where we have discussed the current housing market, signaling that now is a good time to enter the real estate market, whether you are a first time home buyer or someone looking to upsize or even purchase an income generating property.

As interest rates stabilize or decline, the appeal of real estate assets will rise once again. This can be a good time to buy and not wait for the prices to surge in double digits.

Team Kalia serves the entire GTA and surrounding areas

Whether you’re in search of a condo or thinking of buying a home, or considering selling your home to upsize or downsize, don’t hesitate to reach out to us at 905-339-5111.

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