Toronto

Toronto Condo Prices Continue Parabolic Move To New High

Toronto’s condo market is continuing its parabolic price move higher. Toronto Real Estate Board (TREB) numbers shows prices reached a new all-time high in July. Sales of condo apartments failed to make a seasonal decline in July. This applied more pressure to prices, as inventory made the usual drop. The result was more pressure on prices to rise, with the rate of price growth rising to the highest level in months.

Toronto Condo Prices Reach New All-Time High

The price of a condo apartment in Greater Toronto continues its parabolic move. TREB reported the benchmark, a.k.a. typical apartment, reached $543,100 in July, up 8.41% from last year. The City of Toronto benchmark reached $574,700, up 8.32% from last year. Both numbers are new all-time highs according to the benchmark.

Toronto Benchmark Condo Price

The price of a “typical” condo apartment in Toronto.

Source: CREA, Better Dwelling.

The benchmark’s annual rate of growth is improving. Both TREB’s 8.41% and the City of Toronto’s 8.32% increase are higher than the month before. This is only the second month it’s increased, so technically the deceleration trend isn’t broken. However, it’s still the highest rate of growth since December 2018. Price increases may be slowing down, but growth is still very high.

Toronto Benchmark Condo Price Change

The annual percent change of price, for a “typical” condo apartment in Toronto.

Source: CREA, Better Dwelling.

The median sale price also made an increase, but it was a little smaller than the benchmark. TREB’s median sale price reached $520,000 in July, up 7.21% from last year. In the City of Toronto it hit $565,000, up 7.72% from last year. This means half of condos sold at least 4.25% lower than the benchmark price. In the city, the gap was a little smaller, with half of units selling at least 1.68% below the benchmark. This is a big difference compared to detached homes, which had a double digit gap last month.

Toronto Median Condo Sale Price

The median sale price of a condo apartment in Toronto.

Source: CREA, Better Dwelling.

The average sale price also made a similar move for Greater Toronto apartments. TREB reported an average sale price of $584,019 in July, up 6.7% from last year. The City of Toronto average reached $627,927, up 7.7% from last year. The average isn’t adjusted for size, so this is better used as a proxy for dollar flow.

Toronto Average Condo Sale Price

The average sale price of condo apartments in Toronto, and the suburbs.

Source: CREA, Better Dwelling.

Condo Apartment Sales Make Unusual July Increase

Toronto condo apartment sales made a big jump, and an unusual monthly rise. TREB reported 2,277 sales in July, up 13.73% from last year. The City of Toronto represented 1,617 of those sales, up 14.28% from last year. Sales aren’t yet back to 2015 levels for the month, but the price movement is much stronger. This is also one of the rare times July sales increased from June. Sales typically decline from June to July, but this wasn’t the case in Toronto or Vancouver this year.

Toronto Condo April Sales

The number of condo apartments sold in the month of April, by year.

Source: TREB, Better Dwelling.

Greater Toronto Condo Inventory Falls

Greater Toronto saw a small increase in the number of new listings for condo apartments. TREB reported 3,391 new listings in July, up 0.23% from last year. The City of Toronto represents 2,401 of the new listings, up 1.73% from last year. New listings increased slower than sales, sending total inventory tumbling lower.

Toronto Condo Sales Vs. New Listings

The number of condo sales, vs newly listed condos across Greater Toronto.

Source: TREB, Better Dwelling.

The total number of listings for sale made a big decline. TREB reported 3,504 active listings in July, down 12.04% from last year. The City of Toronto represents 2,397 of the active listings, down 7.20% from last year. Typically July isn’t a large month for inventory. The unexpected rise in sales from July took out more inventory than expected.

Toronto Active Condo Listings

The number of condo listings available for sale in Toronto.

Source: TREB, Better Dwelling.

Greater Toronto condo apartment sales bucked the seasonal trend, and increased in July. The unexpected rise placed more pressure on prices, sending them to a new record high. The 12-month rate of growth was higher than the month before, but 2 increases isn’t a change of trend – yet, at least. As for now, the rate of price growth is still decelerating, but at over 8% is still very, very high.

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31 Comments

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  • Reply
    Erik 3 months ago

    Median price falls MOM. Average price falls MOM. Benchmark jumps. Cool story, board.

    • Reply
      Li Gongfu 3 months ago

      New condo sales, also down. Can’t figure out if this is dumb money, or smart scalping on dumb money. They’re going to extract that government handout, easy peasy.

  • Reply
    R 3 months ago

    I’m hearing a good portion of the bump is people (both investors and end-users) trying to get in before the government program injects another billion.

    Whether the government program is going to send prices higher or not, agents are telling their buyers the new program creates a new price floor at the cut off. The government program designed to make things “affordable,” is ironically placing a price floor for prices not to fall though.

    • Reply
      John 3 months ago

      That’s because the reasoning behind the money injection is a fasad. They claim affordability because its palatable to the voter base. In reality, they are protecting existing prices.

      True affordability comes from lower income to cost ratio. I.E. Lower prices or higher income.

  • Reply
    GTA Landlord 3 months ago

    RBC loss provisions up 27%.
    CIBC loss provisions up 21%.

    The institutions see the risk, but the consumer doesn’t.

    Popcorn Time 🍿

    • Reply
      Marc 3 months ago

      BMO reported this morning. Loss provisions up 64.51% Y/Y

      • Reply
        Trader Jim 3 months ago

        Banks don’t really care, since the loss provisions only need to temporarily cover losses until the CMCH repays them, if I’m not mistaken. They’re betting against people, but there’s no risk in continuing to give them cash for a mortgage.

        • Reply
          Lifesucks 3 months ago

          Just an FYI. PCL is probably the only thing banks top executives care as it affects the bottom line. And for CMHC insured portfolios, the banks do not set aside capital or PCL since the risk is transferred and there is no expected loss.

  • Reply
    SCE 3 months ago

    Don’t want to say I told you so, but I told you so. How many people here still renting?

    • Reply
      Jay 3 months ago

      I just bought a detached house, and the owner took a bath of about $300,000 from 2017. I think it worked out just dandy.

      No, I don’t expect my detached house to go up in value. In fact, I expect it to drop over the next few years, but I understand it’s a consumption expense because my wife’s on a clock.

      I’m a recent buyer, and think the bull narrative is loonie and shifts like quick sand. First we were running out of land, that’s why detached prices kept going up. Now they aren’t, everyone just starts saying “well, look at condos!” What happened to the land shortage?

      If you’re buying a one bedroom condo today, chances are you’ll lose most of your gains in taxes and fees when you try to upgrade down the line. But most people don’t think about the cost of transfers. They’ll happily pay $50k/RT on commissions, transfers, and fees, as long as they think it’s going to be a *really* good investment, where they aren’t keeping track of expenses.

      • Reply
        Aldi 3 months ago

        Good purchase Jay

        I am little more bulish than year over the next five years. What alot of the doomsayers forget since Feb 2017 single detached homes in some areas oare areas in GTA are down at least 20% and with the record condo price run the closing of the gap will encourage people to sell their condo and buy a single detached home.

        In the last 6 weeks there has been a signiticant uptick in volume in these homes.
        I live in an area in Toronto dominated by single detached homes that has barely recovered from early 2017 supercharged highs. however, in the last 2 months there has been a dramatic increase in sales volume with addtitional new listings. With about 2/3 of old inventory sold, if sales continue 2020 could be a very strong year for the single detached home in the GTA
        PS I am not planning to sell my home and pitch a tent nor i am going to emigrate a third-world country to escape the collaspe of Canada

        • Reply
          Jin 3 months ago

          Keep in mind if the US goes into a recession, Toronto and Southern Ontario as a whole gets hit particularly hard. FYI a recession has never been declared in an election year, it normally hits just before.

          As for the “third-world” country label, that’s typical Canadian arrogance. Most “third-world” countries have much higher earning opportunities and a faster improvement in quality standards. By 2030, Canada is projected to fall out of the top 20 leading countries by most measures.

          The setup was set by the Great Recession. The slashing of rates and lack of opportunity produced a generational gap, where the BOC slashed rates and printed debt to make up for the lowered dependency rate. In order to fix that, millennials and Gen Z need to spend twice as much, since capital velocity is still falling. They also need to pay twice the taxes as previous generations, because the rising dependency rate still requires services but pays minimal taxes going into retirement. The fix is in, and Canadians are too arrogant to realize it.

          Note: Immigration is the worst strategy to make up for the dependency rate, because they bring their own dependency. It pads GDP, but not on a per capita basis. I once heard an economist say “unless the immigrants are 15 year old orphans, they aren’t solving the dependency issue.” GPD and dependency being two entirely different issues as a whole.

  • Reply
    NirpDeath 3 months ago

    IMO none of this analysis matters.

    The us is going to go to negative interest rates, just like eu and japan in the coming recession, as you need to cut 3 plus percent to stimulate and the current rates around 2. Canada will follow as we cant tolerate a stregthening loonie for exports. Nirp is a slow sovreign default dont kid yourself the central banks arent clueless just desperate.

    This will lead to one last pump in Real estate for those that can get liquidity. Eu and lesser extent japan real estate up since they went negative.

    But like most crack addicts they will keep the game going for couple more years but the pain will be much worse. Were talking the end of your pensions, stock market collapse and their ultimate end game death of the dollar. 90% people will lose everything.

    That dickhead carney admitted recently the dollar system will not survive, and a fake crypto like libra will take its place.

    Place your bets accordingly, gold at ATH in cad/aud/nzd/gbp currently, so these currencies likely to die off first.

    • Reply
      Jin 3 months ago

      Said the person that doesn’t understand NIRP. There’s no last bounce on the cuts. It means banks have to raise credit qualifications, to ensure they don’t take any losses. NIRP is the opposite of liquidity, and the banks usually don’t pass it on. It’s business grade credit, not consumer.

      • Reply
        NirpDeath 3 months ago

        Your entitled to your opinion.

        Go lookup danish negative interest rate mortgages for consumers.

        I said in the comment for those who can get liquidity (800 plus credit score prople are 20% of population).

        Also in japan institutions, I mean bloodsuckers like blackstone are buying up residential real estate, so what does it matter if your average pleb cant?

        You must be a banker as you dont seem to understand Nirp equals death of all banks, just look at deeutchebank/euro banks totally insolvent.

        And if you think a bailout is going to happen this time, youre wrong.

        All hard assets are a buy at this point.

  • Reply
    rustinpeace 3 months ago

    i thought there was a whole whack of condos coming to the market this year. Is that still happening ?

    • Reply
      Macie 3 months ago

      Sure are. Quite a few developers have said they’re delaying launch until after the election as well, so there’s going to be even more.

      The election results would be what determines how high they price out. I believe the Conservatives are against the first-time homebuyer plan, according to the shadow housing critic. The Liberals are obviously pro, because it’s their strategy.

    • Reply
      Adi 3 months ago

      Well 80% percent the is are presold to get project financing approval. The question is at what price(
      do condso have to reach before switching to other segments in the market occurs e.g. detached homes,etx

  • Reply
    Jupiter 3 months ago

    If the government really wanted real affordability they can simpley increase none primary residential property tax by say 100% on ‘investment’ property. There should be no predatory real estate investment when most people can’t afford housing. But obviously the government don’t care, unless you speak out and change the system.

  • Reply
    John 3 months ago

    I am completely and utterly shocked with this website and it’s fear mongering – all articles point to joe condo prices are “too high” real estate is too high and a crash is going to happen – I’m assuming the ones who write these articles don’t own real estate –
    People want to live in Canada – it’s the ONLY stable country –

    • Reply
      Mortgage Guy 3 months ago

      I’m shocked with your ability (or lack thereof), to understand what you just read.

      There was nothing negative about real estate in the above article, you just don’t have the emotional ability to not feel attacked if you don’t like an indicator. I get it, you’re an amateur investor that put all of their money in a condo, but that doesn’t mean everyone is attacking your investment.

      I’m in the industry, and I think it was overly positive in tone. Of course, I’m not trying to screw someone out of their life savings, in exchange for a few bucks. You might be.

      As for Canada being a country people want to live in – I love it. But why are there so many people moving back to their home countries after staying here for a few years? Why are we dependent on mass migration to hit our numbers? You know the answer, so don’t pretend someone saying prices are high is the same as not liking the country. Also, see a therapist.

      • Reply
        SCE 3 months ago

        Really? Some people are moving back home? Check out the census data and let me know where the actual population is vs history. Anecdotal evidence is what bears use to justify everyone else is wrong.

        • Reply
          Mortgage Guy 3 months ago

          It’s adorable when people tell others to look at statistics they clearly haven’t looked at themselves.

          That’s a 57.7% retention rate for those that don’t understand what they’re looking at.

  • Reply
    flipgstring 3 months ago

    Dear John:
    Wow. Talk about fear mongering. If Canada was the Only Stable Country in the World – it would collapse within 5 minutes. Our Banking & Regulatory policies have been tending toward instability. Unaffordable housing policies in our major cities tend toward Human Capital Flight from those large cities – and instability.

    Transfer of liquidity from the Young to Retirees tends toward instability.

    There are serious problems brewing on the horizon Mr. Would Be Feudal Lord – which is why everyone is bitching. Acknowledging a problem is the first step toward fixing things. Which goes without saying for Global Warming.

  • Reply
    aldi 3 months ago

    Hello John
    I agree it is a wonderful country.
    Policy makres do not want to destroy the real estate market so a few are able to get in on the cheap, assuming,of course, that thoes people will be in position to buy and have not been themselves been wiped out by the economic collapse their wishing for.

  • Reply
    Sane citizen 3 months ago

    With negetive interest rates on the horizon, calling for a RE crash in Canada, is just funny.
    We are moving to a world of inflated assets. Most bears cant digest it and want a return to normalcy.
    Thats not happening so they vent on this thread, while big money is laughing to the bank.

    It is not how the world should value things, true, but you and I dont control the world.

    • Reply
      Mac 3 months ago

      As funny as someone that apparently has never looked at negative interest rates and real estate prices in countries like Japan?

      The bubble is due to Canadians thinking it’s different this time, not because of prices. Once you emotionally eliminate risk, you’re inviting in financial terror.

  • Reply
    life hell 2 months ago

    If you would like to obtain a good deal from this paragraph then you have to apply these methods to your won blog.

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