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The Toronto Regional Real Estate Board (TRREB) published a pair of Market Reports this morning, reflecting on key takeaways from the fourth quarter of 2022 in Toronto’s condo and rental markets. The two Reports identified a common trend — a decline in both listings and sales — that is no secret to Torontonians, who have been witnesses to this issue on a monthly basis.
Beginning with the Condo Market Report, despite the combination of declining listings and rising fees, prices remained remarkably consistent compared to Q4 of 2021. “On average, the condo market segment is the most affordable,” said TRREB President Paul Baron. “Therefore, it makes sense that we didn’t see the same type of price adjustment, in the face of higher borrowing costs, compared to other more expensive segments like detached homes.”
The Report shows that the average condo selling price in Q4 of 2022 was $710,520; considering that 2021’s Q4 average selling price was $710,246, the stability of condo prices is one of the only areas where Toronto buyers and sellers may be finding some relief.
More jarring statistics are seen in the number of sales reported in Q4; the total of 3,582 represents a decline by a margin of 54.1% compared to the number of sales reported in Q4 of 2021. Listings in Q4 declined as well, but by a much less dramatic margin comparatively, seeing a drop of 14.3% compared to 2021.
“Condo apartments remain an important segment of the market,” said TRREB Chief Market Analyst Jason Mercer. “They are the key entry point for many first-time buyers. As immigration into Canada continues at a record pace for the foreseeable future, the GTA will welcome many new households. This should see the demand for condos, in both the ownership and rental markets, strengthen moving forward.”
Moving on to the findings of the Rental Market Report, the big story of Q4 was, unsurprisingly, rising rent costs coupled with rising demand. “Strong population growth based on record immigration and robust job creation across a diversity of economic sectors drove rental demand in 2022,” said Baron “In addition, aggressive interest rate hikes by the Bank of Canada impacted affordability for many households, prompting a shift from homeownership to rental. All of these factors will continue to support strong rental demand in 2023.”
The report asserts that, much like in the condo market, the total number of rental listings was down in Q4 of 2022 compared to the previous year. The margin of the decline, however, was not as severe in the rental pool, with TRREB reporting a drop of 11.8%. The trouble arises when you add the rising rent prices to the equation, which were measured to increase by 19% for single bedroom units, and 14.1% for 2-bedroom units in Q4 of 2022, reaching costs of $2,503 and $3,178 respectively.
“Tight rental market conditions and strong rent increases will be the norm more often than not for the foreseeable future,” said Mercer, but he goes on to suggest that hope isn’t lost. “The solution is no secret: we need to see new policies pointed on more supply to translate into shovels in the ground for many years to come.”
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UrbanToronto has a research service, UrbanToronto Pro, that provides comprehensive data on construction projects in the Greater Toronto Area—from proposal through to completion. We also offer Instant Reports, downloadable snapshots based on location, and a daily subscription newsletter, New Development Insider, that tracks projects from initial application.
