Toronto real estate churned out another solid round of stats last month, and condos were no exception. They represented 26% of all sales in September, making it the second largest segment of homes. Although not all areas were created equal. A closer look at the numbers showed that prices moved higher, although more so in the 905 than the city proper. Even with a general decrease in demand.
Prices Move Higher
Prices of condos in the GTA are moving higher, reaching a median price of $367,950. That’s a 0.8% increase from the month prior, and a 9.3% price increase year over year. 58% of condos sold last month were under the $400,000 price tag. This indicates that buyers are likely first-time or looking for secondary investment units.
The interesting thing is how different the market looks in the 905 vs the 416 area. The burbs (a.k.a. the 905), reached an average prices of $367,260, a massive 19.4% increase from last year. Toronto proper (a.k.a. the 416) was at an average price of $446,294 – only a 6.5% increase over last year. This could mean the 905 may be playing catch up, and Toronto’s market might be showing signs of maturity.
Although a wider look at the numbers might not mean that you’re going to get that sweet 20% return in the 905. The average price the month prior was only 9.2% higher year over year. This means there’s a good chance a number of luxury sales are skewing last month’s numbers higher. Although wouldn’t it be great if your condo in the burbs appreciated like a detached home in Rosedale? Not a likely scenario? Didn’t think so either.
Demand Is Decreasing
Demand is slightly lower than it was in August, but that’s not surprising giving the season. Absorption rate moved -7.25% to 64% – still really strong, not quite August. Generally speaking, when absorption is above 20% it’s considered a buyer’s market. It’s a sellers market when absorption is below 15%, and that’s when prices should move lower.
If you were expecting a crash soon, sorry to disappoint. Even with lower demand, that still places Toronto amongst the world’s hottest markets. It’ll be interesting to see if tougher mortgage rules at the end of this month will impact buying power. Although that’s another report for another day.
Price data courtesy of Toronto Real Estate Board, adjusted to standardized City of Toronto wards.
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