Analysts and developers are seeing signs that Toronto’s condo market, which has been on the rise for more than a decade, will moderate in 2019.
“We’re entering right now, the beginning of what will be a record run of condo completions so that’s going to help slow down price growth and rents,” said Shaun Hildebrand, senior vice-president of market research company Urbanation, in an interview with the Toronto Star.
Predictions of a more balanced market is, in one sense, welcome news after what we saw with housing in 2018, where stricter mortgage qualification rules and higher interest rates made it significantly harder to buy a home.
This is likely what made for such strong demand in the condo market. The Star reported that condos “have emerged as the default first home choice and the obvious housing for the workforce that has flocked into downtown Toronto and some of the 905-area municipalities.”
Still, the annual income needed to afford a condo is $100,000, according to Urbanation. If you live downtown, that number rises to $125,000.
Condo prices have been on the rise, too. According to December 2018 market data from the Building and Land Development Association, the benchmark price for condo apartments was up 12% year over year, to $786,602.
According to Urbanation, there were 150,000 condos sold in the past three years in Toronto, and 120,000 that are still in development.
Hildebrand told the Star that he expects condo prices to moderate in the second half of the year. First, he anticipates that price growth will reach over 5% in the first half of 2019. Once interest rates build and more supply becomes available, however, that’s when he says prices should fall.
That said, a clearer picture of what lies ahead may not present itself until February or March, according to Andrew Harrild, a forecaster for Condos.ca.
Harrild also told the Star that sales of higher-priced condos slowed down toward the end of last year. He said that right now, entry-level priced condos (under $800,000) as well as “character buildings” like the Wonder condos at the old Weston bakery site at Eastern and Logan Aves. are the city’s best-sellers.