While fears of a bursting real estate bubble have been somewhat alleviated, the high-flying Greater Toronto Area condominium market appears to be making its long-predicted "soft landing" as evidenced by the latest quarterly market report from the Toronto Real Estate Board (TREB). A drop in sales and listings were recorded by TREB in the fourth quarter of 2018, while the tightening market drove condominium prices even higher.
5,191 condominium apartment sales were reported in Q4 2018, representing a 9.9% year-over-year decline from Q4 2017. Listings took an even more pronounced hit, declining 11.2% from the 8,186 listings in Q4 2017, at 7,272 for Q4 2018. Price growth was quite strong in Q4 2018, with the average price of a condominium apartment in the GTA increasing by a substantial 8.3%, jumping from $516,086 in Q4 2017 to $558,728. Year-over-year price growth within Toronto proper was even higher, increasing 8.9% for an average price of $598,664.
A statement from TREB President Garry Bhaura points to this price growth and relative affordability as factors in keeping condominiums as the top market segment, reading “The condominium apartment segment was the best-performing segment in terms of annual average rates of price growth in 2018. Condos represent a relatively affordable housing option. With a substantial decrease in listings in 2018, competition between intending buyers remained strong. This supported average price growth well above the rate of inflation and annual rates of price growth reported for other ground-oriented home types.”
Condominiums remain an important entry-level option in the GTA, and factors including higher mortgage qualification standards are pushing first-time homebuyers towards lower-cost options. A quote from Jason Mercer, TREB’s Director of Market Analysis, once again puts focus on housing supply and its impacts on the market, stating that "the concern is that a continued lack of listings supply, despite relatively strong new condo completions as of late, will hamper the ability of potential homebuyers to meet their housing needs."
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