October has proven to be another red hot month in terms of overall sales. TRREB reported 10,563 sales which is up 25.1% compared to 8445 transactions in October 2019. The average price was also up 13.7% to $968,313 from this time last year. These numbers represent much of the listing/sales transactions that would normally have been part of the spring/summer market in April/May/June as we saw a delay in the new listings and sales when COVID-19 caused with initial lockdowns at the start of what would have been the spring market. The reality is that the number of year to date sales overall are very similar to where we were at this time last year while prices have still increased due to the ongoing supply issues. 

However, considering we are in the middle of a pandemic and the market results still seem positive, the market continues to grow in completely different directions depending on market segment. The above general numbers released by TRREB are generally representative of the market in entirety and its only when you seperate the sales into their respective market segments that the real picture emerges. On one hand, the detached home market has seen the annual pace of sales growth exceed the growth in new listings as supply continues to be the main issue which is also the cause of the rising prices each month. On the other hand, the condominium apartment market experienced more than double the new listings compared with October 2019. That means far more options for condo buyers especially in the 1 bedroom and 1+1 bedroom segment which has impacted sales prices negatively.  

(Click Image For Full Report)

Not all condominiums are created equally or for the same purpose or demographic and we are also seeing different trends within the condo market itself. The low-rise market is still generall performing well and the farther out of Toronto you go, the hotter it becomes (because prices are lower). Low rise condominiums tend to be attractive for end users and generally have fewer rental units within them. As you can see from the data chart above the # of sales and prices are climbing higher in the 905 and areas outside the 416 for this exact reason. High rises in the downtown core and buildings with a higher rental demographic have been hit the hardest. International students have been working from home, corporate transfers have stopped, immigration has been paused and there is really no after hours flow of people into the city where many of the hardest hit condominiums are located. The vacancy in many rental/investment units began to climb over the previous couple months and investors who have been unable to afford to carry their units with no or negative rents each month have been forced to list for sale on the open market.  Q3 condo results reported a whopping 118% increase year over year in active listings compared to Q3 in 2019 and while the average price still continues to inch upwards it will take the next few months to determine if that trend will continue. 

(Click Image For Complete Q3 Condo Report)



In 2 quarters of 2020, the condo rental market has essentially been flipped upside down. TRREB (Toronto Real Estate Board) reported 14,036 condominium apartment rentals through TRREB's MLS System during the third quarter of 2020. This was an increase of 30.2 per cent over Q3 in 2019. The number of condo apartments listed for rent during Q3 2020 was up by 113.9% compared to Q3 of 2019. That being said demand, was still very strong in Q3, with a record number of quarterly transactions reported. Many investors-owners took their units out of the short term rental market due to stricter regulations and the COVID-19 related tourism downturn. The result was more choice and more regotiating power for renters. The average rent for a one-bedroom condo unit was down 11.1% year over year in Q3 2020 to $2,012 compared to $2,262 in Q3 2019. The average rental rate for a two-bedroom condominium apartment was down by 9.2% to $2,672 compared to $2,941in Q3 2019. These numbers were even higher in some areas and certain specific buildings that had seen high rental price growth in the past few years. 


So is this market shift away from condos condos longterm? (absolutely not). It will likely be a bump in the market for as long as we have to stick handle the COVID-19 Pandemic. There are understandable reasons for the condo market changes. For starters, people working from home don't need to be concerned with a commute and since there is little to no travel to Toronto for pleasure or work or education and very little in terms of entertainment that would draw people into the city it would be expected that less rental space is required. The short-term rental market faced new regulations earlier this year to begin with and as tourism & immigration has dried up some of the rental market requirements are on hold for the time being. That being said, rentals in many neighbourhoods are still active and healthy with regular turn over and consistent rates. 

From the sales perspective, In the short term,  it is reasonable to expect that prices in the condo resale market may creep down as more new listings hit the market each month. Sellers are going to have to be patient and expect longer days on market to sell with potentially more creative offerings to help sales and a close following and understanding of the surrounding market to make price adjustments where necessary. Prices are off by roughly +/5% in most areas  and many investors understandably may decide to wait out the market until the dust settles on the rental market but timing a pandemic will be tricky and for those looking to buy it can be argued that now is still the best time to buy a condo that we have seen in a long time especially if your looking as an end user. Competition is less and there are many choices. Longterm, the reality is people don't just change their lifestyle overnight, and when the GTA re-opens, and immigration re-emerges (Canada's federal government estimated 400,000/year into Canada with Toronto & GTA normally seeing the bulk) its expected that the condo market will be back to where it was pre-pandemic. 

Stay Tuned!


Posted by Paul Ambler on


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