Condo market conditions tightest in 20 years, says Toronto real estate board

Toronto region condo prices surged skyward in the final quarter of last year with the Toronto Regional Real Estate Board (TRREB) reporting some of the tightest market conditions in 20 years affecting both condo buyers and tenants.

The average selling price of a condo climbed 16.4 per cent year over year in the fourth quarter to $ 710,087, the real estate board said Thursday.

The record 7,815 sales in that period was 21 per cent higher than the 6,462 transactions in the last quarter of 2020.

But a shortage of supply meant tough competition among buyers that pushed up prices as new listings tumbled 29 per cent annually and active listings plunged 65 per cent.

Real estate board president Kevin Crigger attributed the heavy demand to first-time home buyers, who waited to purchase in the first part of the pandemic but “re-entered the market with vigor last year.”

That robust demand, fed by immigration and temporary migration, is expected to continue this year, he said.

The board’s chief market analyst Jason Mercer also forecast continued double-digit price growth as supply continued to tighten.

He called it a dramatic reversal of the early part of the pandemic when condo prices flattened while the number of available units spiked as investor owners looked to dispense with properties they could not rent because of the outflux of tenants from downtown.

Now the condo shortage is also affecting renters, pushing condo lease prices higher and suppressing vacancy rates. There were 13.9 per cent fewer condos rented in the fourth quarter compared to 2020. The number of condos available to rent toppled 49 per cent in the same period, said the real estate board.

At the same time, rent on a one-bedroom condo apartment increased rose 13.7 per cent annually to $ 2,099. Two-bedroom units increased 12.6 per cent to $ 2,763.

“After a relatively brief pandemic-induced blip in rental supply, available rental listings have declined,” said Crigger. “This has made it more difficult for would-be renters to find a place to live.

“Essentially you can not rent what is not available,” he said.