After facing slow sales and project cancellations for a year, the condominium market in Canada’s largest city is displaying signs of recovery. Tyler Florian, enticed by reduced prices, bought his first property, a two-bedroom condo in downtown Toronto’s Fort York area earlier this year. Florian, a 29-year-old financial planner, had been contemplating whether to move downtown and rent or continue saving to make a purchase. Utilizing the First Home Savings Account and the RRSP Home Buyers’ Plan, along with favorable interest rates, Florian successfully acquired his first property.
Realtor Thomas Delespierre noted a shift in Toronto’s condo market from a seller’s market, where units sold rapidly within two weeks, to a buyer’s market, where condos can linger on the market for four to six months. The Toronto Regional Real Estate Board’s latest data suggests an end to the condo market slump, with a 14.4% year-over-year increase in sales last month. However, condo prices continued to decline, dropping by 6.4% to an average of over $665,000.
Jason Mercer, TRREB’s chief information officer, attributed the increased activity in the housing segment to lower prices and borrowing costs, drawing back individuals who had been awaiting improved affordability. Although competition among buyers could drive condo prices up once more, especially with fewer new units being constructed. This trend is not exclusive to Toronto, as surrounding suburbs and municipalities in Ontario’s southwest also witnessed price and sales decreases.
The Daniels Corporation, a prominent real estate developer in the Toronto region, has adjusted its condominium unit mix over time, shifting towards more spacious layouts. President Jacob Cohen mentioned that while there is still demand for studios, there is an emphasis on one-bedroom, one-plus-dens, and two-bedroom units. The Canada Mortgage and Housing Corporation reported a decline in housing starts in Toronto last year, primarily in multi-unit projects, which is continuing based on the latest data.
Despite challenges such as project cancellations and declining sales, developers like Pouyan Safapour from Devron Developments remain cautiously optimistic. Safapour expressed confidence in the pre-construction sales for the upcoming 1 Marlborough project in Rosedale. To secure financing and proceed with construction, typically 70% of units need to be sold, a threshold becoming more challenging due to the retreat of investor-buyers from the market. Developers are now focusing on end-users to navigate market shifts.
In summary, the condo market in Toronto is showing signs of a rebound, with buyers benefitting from lower prices and increased choices. Developers are adapting to the changing market dynamics by offering more spacious units and targeting end-users. While challenges persist, there is cautious optimism for the future of the condo market in the city.