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A record fourth quarter capped off a record year for condominium suite sales in 2021 in the Greater Toronto Area. According to new figures from the Toronto Regional Real Estate Board (TRREB), while condo listings were high from a historic perspective, it was not a record year on the supply side of the market. In fact, condo buyers experienced some of the tightest market conditions in 20 years. Strong competition between buyers led to an acceleration in price growth to a new record, including double-digit annual growth reported in Q4 2021.
“In the early days of the pandemic, we saw a spike in condominium apartment listings and a brief lull in condo price growth," said TRREB Chief Market Analyst Jason Mercer. "The situation reversed dramatically in 2021, with the number of available units dropping in the face of strong demand." Mercer expressed belief that the resulting double-digit price growth will continue into 2022.
A summary of the Q4 2021 condo market is as follows:
- Q4 2021 condo apartment transactions amounted to a record 7,815 in the GTA – up almost 21% compared to 6,462 in Q4 2020.
- On the supply side, the number of new listings entered into TRREB’s MLS System in Q4 2021 was down almost 29% to 8,758.
- With condo sales up substantially year-over-year in Q4 and new listings down substantially, active listings at the end of December 2021 were down by almost two-thirds compared to the end of 2021.
- Very tight market conditions, with strong competition between buyers, resulted in an acceleration in price growth in the fourth quarter, pushing the average selling price up by 16.4% to $710,087.
“The resurgence in the condo market was a key real estate story for 2021," said TRREB President Kevin Crigger. "First-time buyers, who arguably remained on the sidelines longer than existing home buyers during the earlier stages of the pandemic, re-entered the market with vigour last year." Crigger said he expects that condo demand will be robust in 2022 as well, with the expected increases in immigration and temporary migration into the GTA.
Conversely, rental apartment transactions dipped in Q4 2021 compared to the same period in the previous year. This drop was due to an even greater year-over-year decline in the number of units available to rent. Following tightening rental market conditions, year-over-year growth in average rents accelerated into the double digits, as rents moved closer to pre-pandemic peaks.
“The lack of housing inventory is not just an issue for the ownership market in the Greater Toronto Area," said Crigger. "After a relatively brief pandemic-induced blip in rental supply, available rental listings have declined. This has made it more difficult for would-be renters to find a place to live – essentially you can’t rent what isn’t available. By extension, the lack of inventory has also resulted in increased competition between renters, pushing average rents higher."
A summary of Q4 2021 results are as follows:
- Total Q4 2021 condo rental transactions amounted to 10,820 – down 13.9% year-over-year.
- There were 16,972 units listed for rent – down by 48.9% compared to Q4 2020.
- The average one-bedroom condo apartment rent was $2,099 in Q4 2021, representing a 13.7% increase compared to the same period 2021.
- Over the same period, the average two-bedroom condo apartment rent increased 12.6% to $2,763.
“Demand will increase as both immigration and temporary migration into the GTA picks up over the next year," said Mercer. "Both sources of population growth result in more demand for rental accommodation. In the absence of a marked increase in the supply of rental units, we should expect average rents to trend further upward in 2022."
TRREB will be releasing its latest Market Outlook and Year in Review report on February 3rd. The report will contain information on the rental market, including polling results based on responses from investor-owners of condominium apartments.
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