Toronto Condo Market Report – Pandemic Impact
Contrary to expectations, is was a busy summer the real estate market in the GTA. Pent-up demand from Spring, low interest rates, high demand & low supply are contributing to the surge in sales activity even at peak of the pandemic.
Home sales in the GTA soared to 11,083 transactions, which is 42.3% higher than same time last year. The average home price climbed by 14% to $960,772. We are witnessing sales across all categories, including: condominiums, townhouses, semi-detached and detached houses according to the Toronto Regional Real Estate Board Reports.
The RE/MAX Fall Market Outlook Report suggests that Toronto housing prices are expected to rise 5% for the remainder of 2020.
However, one category that could come under pressure is the condo market. From the impacts of COVID-19 to the changes in short-term rental market, condo prices might not be able to keep up with the growth across other housing categories.
Toronto Condo Market Report – Fall Projections
While our region is officially in the second wave of COVID infections, it is hard to say if we could be headed for another lockdown. There is definitely an uncertainty around it for the next several months, especially with the cold and flu season on the horizon.
One of the direct effects of the pandemic on the real estate market & consumer sentiment is that a lot of people have been moving out of the city to rural communities. Many urban condo dwellers quickly realized the need and benefit of trading their condo elevators for doors that open to inviting front and backyards. Condo amenities, which used to be a big attraction, are no longer a big pull, due to health safety hazards.
The short-term rental market, like Airbnb, has almost come to a standstill. Condo owners are either turning their units into long-term rentals or selling their properties. While these units are hitting the resale market, there will be many builder new condo buildings that will be hitting the market too in the next 1-3 years. Supply will out-strip demand. Condo prices and rents are expected to decline in the coming months.
And then with borrowing costs at historic lows, families are choosing to upgrade within the GTA, or in smaller rural markets. Some people are also moving to downtown Mississauga condos, which are somewhat cheaper and still provide great connectivity with Toronto. The Mississauga condo market is also reeling under the effects of supply & demand issues, but there is still a lot of activity projected for the Mississauga condo market in Fall 2020.
It may have seemed for the last two decades that condos would dominate the Toronto housing market, it looks like this segment may be experiencing a slow-down with buyer’s market conditions in store this Fall.
On the flip side and on a positive note, this could allow hopeful homebuyers to enter the market after sitting on the sidelines for too long. Next few months could also signal a positive consumer response and confidence level in condominium living, that is if we are collectively able to beat the pandemic.