Sales Summary
Typical of a seasonal spring, home and condo listings surged in April, up 47.2% from last year, and this trend is expected to continue in May. With the new level of supply, the market has shifted towards a more balanced state, with some sectors like condos leaning closer to a buyer’s market. The increase in inventory, providing more choices, has made prospective buyers the biggest winners. Although April’s sales this year were lower compared to the same time last year, these numbers do not reflect the high interest levels, as demonstrated by the significant number of property showings booked by buyers. This indicates confidence among buyers who are either waiting for the right moment to enter the market or have yet to find their ideal property.
Buyer feedback suggests that the prolonged period without interest rate cuts has encouraged them to take their time and not feel pressured to make quick decisions. Many are choosing to wait on the sidelines in anticipation of a possible further decline in real estate values. Unfortunately, these buyers have not yet seen the anticipated opportunity materialize, as real estate values have remained steady or even witnessed slight increases. While some homes have lingered on the market for extended periods, those in desirable locations, move-in-ready condition, or unique features are often selling quickly, sometimes with multiple offers. This mixed market scenario indicates that buyers are positioning themselves ahead of potential future rate cuts.
Furthermore, luxury real estate in the $3 million to $5 million range has remained active, unaffected by interest rate fluctuations in buyers’ decisions.
GTA MLS® NEW LISTINGS
APRIL 2024
This chart plots Monthly MLS® New Listings for the current year and the previous three years. The recurring seasonal trend can be examined along with comparisons to previosu years for each month.
Source:Toronto Regional Real Estate Board
PRE-CONSTRUCTION AND CONDOS
The resale condo market has seen a 66% increase in inventory, outpacing demand. Despite this, an uptick in resale condo sales has resulted in only marginal price declines, signaling stability. The most active sales are below $900,000, with end-users remaining the primary buyers. This trend does not discount resale condo investors, who are considering re-entering the market. Experienced investors understand that real estate is a safe and secure hedge against inflation.
Developers of pre-construction projects have significantly slowed down, essentially halting operations in the first quarter of 2024. This contrasts with the government’s policy initiatives aimed at faster housing construction and increased affordability. Although sales of brand-new condos have declined and unsold inventory has risen to over 23,000 units, builders anticipate a swift absorption rate once interest rates begin to decrease. Investors predict that this reduced construction activity will drive prices higher in the coming years. Forecast models suggest that only 5,000 completed units will enter the market by 2028, signaling a rebound in values that will likely surpass previous highs.
CONDO COMPLETIONS & SCHEDULED OCCUPANCIES
GTA 2014 to 2028
Rental Commentary
Toronto saw a 19.7% increase in condo apartment leases year-over-year, totaling 12,541. This surge was accompanied by a 51% rise in rental listings, providing renters with more choices and stabilizing average rents. Specifically, the average rent for a one-bedroom condo decreased by 1.2% to $2,441, while two-bedroom rents remained steady at $3,139. Growing inventory has helped moderate rental prices despite increased demand due to population growth in the GTA. Expect the trend of rising condo inventory to continue, as more renters are expected to transition to homeownership as borrowing costs decline.
AVERAGE TORONTO CONDO RENT
Q1:2024
