Condos became a popular alternative to detached homes as home prices soared in Vancouver and Toronto and homebuyers were forced to adjust their expectations. But now, the popularity of condos in Canada’s largest city has begun to wane in more ways than one.
Hot on the heels of news that condo prices in Toronto are growing at their slowest rate in years, the Toronto Real Estate Board (TREB) reported Thursday that condos are the only home type whose sales are actually declining.
Condo sales in the Greater Toronto Area (GTA) fell by 3.2% in June compared to the same month last year, according to TREB’s monthly Market Watch report. In contrast, sales for detached homes surged by 18.6%, while semi-detached homes and townhouses saw their sales increase by 9.4% and 12%, respectively.
When every home type is taken into account, GTA sales were up 10.4% last month, even as active listings declined by 5.7%. The growth in demand, coupled with dwindling supply, means that competition between buyers increased.
Prices are heating up again
It’s no surprise given higher sales and fewer properties being listed on the market that prices also grew. The average price of a home in the GTA in June was $832,703, up 3% from June 2018. Semi-detached homes and condos saw the biggest price increases — 5.3% and 5.2%, respectively — while detached home prices fell by 1.4%.
“Buyers started moving off the sidelines in the spring, as evidenced by strong year-over-year price growth throughout the second quarter,” said Jason Mercer, chief market analyst at TREB.
“However, because we saw virtually no change in the number of new listings, market conditions tightened and price growth picked up, especially for more higher density home types, which, on average, are less-expensive than traditional detached houses and therefore provide more affordable housing options under the new OSFI stress test regime.”