There are many differences between Toronto’s low-rise and high-rise markets––not least of all, the backyard that you’ll get with homes in the former––but Toronto’s real estate board recently nodded to a way they’ve become more alike.
“Similar to the low-rise market segments, we have seen growth in condo sales outstrip growth in condo listings this year,” said Jason Mercer, market analysis director for the Toronto Real Estate Board (TREB), in a recent statement.
Mercer’s remarks came with the release of TREB’s latest Greater Toronto Area (GTA) condo market figures, which showed 8,965 condo sales were recorded through the board’s multiple listing service (MLS) system in 2016’s second quarter, a scorching increase of 17.4 percent compared to activity during that period one year prior.
As Mercer’s comments suggested, the number of new listings plummeted at the same time. Sellers put 13,589 condos on the market from April to the end of June, down 7.9 percent from those three months in 2015. And at the end of June, active listings totaled 5,185, an eye-popping 27.9 percent collapse from a year ago, according to TREB.
Looking at falling listings during a time of increasing activity, it may come as no surprise that condo prices have been appreciating at a faster rate recently. In the second quarter, the average selling price of a condo in the GTA was $415,326, having risen 7.1 percent over what it was in the second quart of 2015.
Yet, condo and house sales in the Toronto market march on, and in a video interview with Bloomberg this week, Benjamin Tal, CIBC’s deputy chief economist, touched on this trend.
“We are in a twilight zone. We are in a city, like Vancouver and Toronto, [where] prices are elevated and they justify higher rental activity, but we are not renting––we are still buying,” the economist said.
“We didn’t develop this rental mentality that we see in New York, London, and other places,” Tal explained to Bloomberg. “The only reason they (buyers) can do it is because of the fact that interest rates are extremely low.”
Image courtesy of Umair Khan