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Condos continue to show the strongest price growth year over year in Toronto compared to all other market segments, according to the May release of Toronto Real Estate Board data. Condos for sale in Toronto grew 6.5 per cent from last year to $602,804. Meanwhile, detached housing continues to soften, with prices declining 5.6 per cent to $1,426,094, and semi-detached and townhouses are stable. The average condo also sold faster than the market average: 17 days instead of 20 in May.
Still, condos haven’t escaped the sales plunge affecting the entire GTA market. Just 1,745 condos sold this month — 13.8 per cent fewer than last May. Even in this regard, however, condos show a less severe decline. Detached and semi-detached sales have both dipped over 30 per cent, while townhouses about 17 per cent.
The discrepancy in the numbers between condos and other market types appears to lie in their affordability. Among all Toronto real estate listings, condos offer the most attractive price point to prospective buyers. The difference between a condo unit and the next most affordable type, townhouses, is still about $140,000. With federal lenders now having tighter qualification rules, borrowers may be having a hard time obtaining funds to close that gap.
There’s also just not that many townhomes in Toronto. Only 203 were sold in May, demonstrating an extremely low supply. A Canadian Centre for Economic Analysis study undertaken for TREB found that there is a missing middle between condos and detached houses. It found that many are “over-housed” in Ontario, with large homes that have empty bedrooms. These people don’t list their house for sale because they feel there’s nothing to move into — their not ready for a condo lifestyle, but there are no townhomes available. “Home ownership remains a sound long-term investment. Unfortunately, many home buyers are still finding it difficult find a home that meets their needs,” says Tim Syrianos, president of TREB.
This post was created in partnership with Zoocasa.com, a leading real estate resource that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse condos, townhouses and houses for sale in Toronto.