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A second-quarter 2021 report released this week by the Toronto Regional Real Estate Board (TRREB) is showing a strong resurgence in condo sales and unit rentals as the Greater Toronto Area (GTA) emerges from the COVID-19 pandemic. Q2 2021 saw condominium apartment sales rise substantially year-over-year, while dipping slightly from the frenzied demand seen in the first quarter of 2021. The number of condominium apartment rental transactions, meanwhile, climbed substantially in Q2 2021, outpacing transactions in the first quarter of the year.
A total of 8,793 condominium apartment sales were reported across the GTA in the second quarter, a 155% increase over the lows seen in Q2 2020 when the pandemic was scaring off speculation while complicating marketing campaigns and condo transactions. This triple-digit increase is more the result of the bottomed-out market of last year than representative of forward market momentum. In fact, Q2's volume of sales was actually 6% lower than the sales recorded the previous quarter.
“There is no doubt that the condominium apartment segment has improved markedly over the past six months, after lagging the low-rise market segments in the second half of 2020. Consumer polling conducted by Ipsos for TRREB suggested that about 40% of buyers in 2021 would be first-time buyers. For many first-time buyers, their entry point into homeownership is the condo market so we expect further upward movement this year with accelerated migration back to cities and heightened immigration,” reads a statement issued by TRREB President Kevin Crigger.
Average GTA condominium selling prices jumped 10.8% year-over-year and just over 6% quarter-over-quarter, reaching $686,312. Much of this price growth can be attributed to record selling prices recorded in the region in May, before dipping from this peak yet still remaining high in June. Almost 70% of GTA condo transactions in Q2 were within the City of Toronto, where the average selling price climbed 9% year-over-year to $721,109.
“The second quarter marked a turnaround for the condo market in terms of price growth. Whereas other market segments experienced a resurgence in price growth in the latter half of 2020, the condo market took longer to recover. Looking forward to 2022, condo demand could very well strengthen as immigration picks up and younger people, more impacted by COVID-19, look to purchase a home,” reads a statement from TRREB Chief Market Analyst Jason Mercer.
Rental transactions in the GTA more than doubled year-over-year in Q2 2021, while also rising 13.1% quarter-over-quarter. The 14,920 condominium apartment rental transactions reported is a substantial increase over 7,300 in Q2 2020 and over the 13,168 in Q1 2021. Demand exceeded supply during this period, measured both year-over-year and quarter-over-quarter, this despite the 24,789 condos listed for rent being up by almost 15% quarter-over-quarter. This figure marks a drop from the 28,784 units listed in Q1 2021.
“It is clear that the demand for rental accommodation has substantially increased compared to last year when there was a temporary pandemic-related lull. Strong rental demand will continue into next year, as immigration into the GTA picks up and we see a resurgence in the student population. With rental market conditions already tightening, and demand set to increase, we expect future increases in average rents. This trend further reinforces TRREB’s continued call for government action to increase supply,” stated Kevin Crigger.
The pandemic has brought on much fluctuation in the price of rented condominium units, with one-bedroom rents falling 9.4% year-over-year while rising 3.7% quarter-over-quarter to $1,887. Average two-bedroom condo rents followed the same pattern, dropping 4.8% year-over-year but up by 5.6% vs Q1 2021, now averaging at $2,583.
“Renters continued to benefit from lower average rents compared to last year, which was a contributing factor to increased rental transactions. But, the situation is changing. It is clear that rental market conditions are tightening and will continue to do so as population growth resumes. This will result in declining vacancy rates and an acceleration in rent growth into 2022,” stated Jason Mercer.
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