Condos aren’t as hot as single-family detached homes, but they’re still very much in demand in Toronto. The latest numbers from the Toronto Real Estate Board (TREB) show that November 2016 far outpaced performance this time last year. Condos saw higher prices, less listings, and a higher rate of absorption.
Prices Moved Higher
The benchmark average price of condos rose (again) across the Greater Toronto Area (GTA) to $443,586 – a 15.1% increase from last year. This trend was more pronounced in the 905 region, where prices rose 18.9% to $374,792. Although the city proper is no lagger, having rose 13.5% to $471,256. Condos in both region underperformed the rest of the GTA market, which averaged 22.7% increase from last year.
Prices in Toronto
Sales Are Up, Listings Are Down
Inventory shortage is a common thing we’re hearing from agents, and the latest numbers support that narrative. Sales in the GTA increased a whopping 25.8% since last year to 2,409. New listings declined in contrast by 12.2% to 2,740 in November. Essentially, there’s less supply and more demand. Whether that demand is justified or artificial is up for debate, but the bottom line is it doesn’t matter if you’re looking for a place in the near-term. Likely a big part of why condos are selling in an average of just 21 days – 36% faster than the same time last year.
Sales vs. New Listings
Absorption Is Higher
The absorption rate for condos in the GTA is looking very bullish this month in contrast to last year. The rate at which new listings was purchased at 46% – a 76% increase from last year. In it’s simplest form, this means that there is less inventory building up than in November 2015. Prices generally rise when absorption is higher than 20%, and lower when absorption is below 10%. This assumes rational market players however, not people worried about missing out.
Toronto Condo Absorption
Pending New Releases
Although this is a strong condo report, there are a few headwinds you should consider. A large number of the units are being sold by speculators, which has the tendency to amplify movements in either direction. Additionally, there’s a large number of new condos slated for registration in the GTA over the next couple of years. This could provide downward pressure on absorption.
Source: TREB.
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