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In the first quarter of 2022, condo suite sales remained strong in the Greater Toronto Area (GTA) — the average selling price increasing by more than 20% year-over-year — with the 'seller’s market' conditions that we have seen of late remaining in place, according to the latest data from the Toronto Region Real Estate Board (TRREB).
Similarly, tight rental market conditions continued in the first quarter of 2022, pushing average rents closer to the pre-pandemic peak. Rental transactions were down year-over-year, largely due to rental listings having dropped by an even greater annual rate. The result of it all was increased competition between renters, and double-digit rent increases.
GTA realtors reported 7,932 sales through TRREB’s MLS System in Q1 2022 – representing a decrease of 15.6% compared to the record Q1 2021 result of 9,399 sales. On the rental side, realtors reported 10,110 apartment rentals through the MLS in Q1 2022 – down by 23.2% compared to Q1 2021. Despite this, rental transactions as a share of listings were up on a year-over-year basis, suggesting that the demand remained strong while the supply of available units dipped.
"Many first-time buyers see condos as an affordable entry point into homeownership." said TRREB President Kevin Crigger. "At the other end of the spectrum, condos provide a luxury alternative for many households. It is also important to note that investor-owned condominium apartments have been an important source of rental supply over the past decade.”
Crigger commented that immigration will be at or near record levels over the next two years, with the number of non-permanent residents, including students, projected to increase. "Many of these people," he said, "will turn, at least initially, to the rental market. Investor-owned condominium apartments will remain a key source of rental supply in the region. It is clear that rental demand is increasing relative to available units. While the homeownership market often dominates the headlines, policymakers also need to be cognizant about the need for rental housing supply as we move forward.”
While first quarter sales were down year-over-year, new listings of condominium apartments were basically flat, meaning condo buyers had some relief in terms of market conditions. Despite this, market conditions remained tight enough to support double-digit annual average price gains, with the average condominium suite price increasing by 22.5% to $790,398.
In terms of renting, the average one-bedroom condominium apartment rent increased by 17.8% to $2,145 in Q1 2022, from $1,820 in Q1 2021. The average two-bedroom rent was $2,867 in Q1 2022 — up by 17.2% year-over-year compared to the average of $2,446 in Q1 2021. For perspective, the pre-pandemic peak in average rents was in Q3 2019, with the average one-bedroom rent at $2,262 and the average two-bedroom rent at $2,941.
“The GTA population will grow at or near record levels over the next few years, supported by a strong regional economy," said TRREB Chief Market Analyst Jason Mercer. "The condominium apartment segment will be an important source of housing, both for people looking to purchase a home and also those looking to rent. This will continue to support price growth, but the pace of price appreciation may moderate as the market becomes more balanced over the next year."
Mercer commented that over the past year, there has been an upward trend in average condo apartment rents. He suggested that this rebound in the rental market took hold as a result of accelerated population growth throughout last year. "Demand for rental accommodation is expected to remain strong this year and beyond, as job growth continues, immigration and non-permanent migration continues to support housing demand, and higher borrowing costs see some young people put their decision to purchase a home on hold,” said Mercer.
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