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Following up on Toronto Real Estate Board's (TREB) recent release of housing and commercial market figures for December 2016, two new TREB reports are shedding light on condominium and rental housing transactions during the fourth quarter of 2016. These new figures show that an increase in condominium sales was recorded in Q4 2016, rising 22.3% year-over-year to a total of 6,831 units. In contrast, new condominium listings decreased by 13.4% during the same period.
By the close of 2016's fourth quarter, the apartment benchmark price was up by 15.2% year-over-year, while the average condo selling price increased by 14.5% to a new figure of $437,281. The rise in sales combined with the decline in new listings has resulted in a much tighter condominium market than what was experienced in the recent past.
“Gone are the days when we were concerned about a potential glut in inventory in the condominium apartment market", said TREB President Larry Cerqua. "The supply concerns that have been top-of-mind for ground-oriented home types are also now a reality for the condo market segment. Regardless of the price measure considered, heightened competition between condo buyers has resulted in double-digit price inflation,” continued Cerqua.
These changes in the condominium market are echoed by a tightening in the Greater Toronto Area's rental market, with 5,717 rental apartment transactions recorded in Q4 2016, a 5.8% drop from Q4 2015's figures. While numbers are down, TREB points to the figures being a reflection of the current lack of inventory rather than a dip in demand. This is evidenced by the over 14% drop in apartment listings in Q4 2016, with 9,545 transactions recorded. Supply was likely a factor in the average one-bedroom condo apartment rent rising 7.4% year-over-year to $1,776, while two-bedroom rents increased 8% to $2,415.
“The demand for rental accommodation has increased in the GTA. The condominium apartment vacancy rate dropped markedly between 2015 and 2016. In many parts of the GTA, investor-owned condo apartments are the only option for renters looking for new, modern units in sought-after neighbourhoods. In the absence of more units coming available, expect above-inflation rent growth to continue,” said TREB’s Director of Market Analysis Jason Mercer.
