Tighter mortgage lending rules put in place this January have supported condo price growth in Toronto, and this November was no different.
OSFI, the federal bank regulator, now requires borrowers to qualify at their contract rate plus two per cent, or the Bank of Canada rate, whichever is higher. This new evaluation appears to have pushed Torontonians into the least expensive market segment, specifically condos.
Condo units grew 7.5 per cent on average to about $556,700 in the Greater Toronto Area year over year this November, second only to semi-detached houses which grew a surprising 8.3 per cent to $791,700. Single-family homes, by far the most expensive housing type, edged up 1.3 per cent to just over $1 million and townhouses 3.1 per cent to $647,500.
“Home types with lower average price points have been associated with stronger rates of price growth over the past few months. Given the impact of the OSFI-mandated mortgage stress test and higher borrowing costs on affordability, it makes sense that the condo apartment and semi-detached market segments experienced relatively stronger rates of price growth in November, as market conditions in these segments remained tight or tightened respectively over the past year,” said Jason Mercer, the Toronto real estate Board’s (TREB) director of market analysis.
The majority of unit sales occur in the City of Toronto, with 1,370 out of a total of 1,891 across TREB’S entire region. Within Toronto, the most transactions – 146 – occurred in the east end of downtown, in the area encompassing the Church-Yonge, Cabbagetown, Jamestown, Regent Part and St. Lawrence Market neighbourhoods. Outside of the 416, Mississauga is the most popular spot for high-density living, with 181 units sold, along with Kitchener homes for sale, where 152 condo units were sold.
Toronto’s Rosedale-Moore Park neighbourhood boasts of having the most expensive units in the GTA, with 11 sold at an average price just over $1.3 million.
In contrast, the area including Willowdale-Martingrove-Richview, Humber Heights and Kingsview Village neighbourhoods is the most affordable in the 416, with 24 condos selling at an average of $317,804.
Want to see how other property types are doing? Check out the infographic below.
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