Will Toronto Condo Prices Drop?
This is a common question that I get asked “Ryan, will condo prices drop in Toronto finally?”. Unfortunately, I see no possibility of a drop in the near future. Condos have been driving Toronto’s real estate market for more than a year and a half. There are too few new condos coming to market to serve the population growth in the city of Toronto. We have approximately 200,000 people moving to the GTA on an annual basis. This is incredible growth. The primary issue lies in the supply pipeline. According to a recent presentation I attended with Urbanation, we have an average of 25,000 new condo units coming to market annually and 1500 purpose built apartments coming to market. Simply put this is not enough to turn the Toronto condo market into a buyers market. The demand is far too strong. Sellers are in the driver’s seat.
Toronto condos are looking like it will be yet another year of double-digit percentage growth in value. 2017 saw an increase of approximately 35% in the old city of Toronto. I don’t know that we can expect that same result this year, however, I would not at all be surprised if we see the growth of more than 1.5%/month (18%/year or more).
2019 is the year when we see old city of Toronto condos prices valued at more than $1000/square foot. Many resale condos are already there in the downtown core. It’s simply a matter of time until the high demand of buyers pushes the values up across the board.
Buyers are becoming savvier as to what they are looking for in a condo, location etc. This will further highlight the condo price increase in Toronto for the finest condos on offer.
Condos have historically gone up at 5% a year, we are now seeing huge gains. I’m certain that this value increase will level off as affordability begins to hinder buyers but there is still a massive need for housing in our city so this will drive demand for a long time to come.
