High borrowing costs and persistent affordability concerns weighed heavily on the Greater Toronto Area (GTA) condo market at the end of 2023, pushing quarterly sales to their lowest level in over 12 years.

According to the latest Condo Market Report from the Toronto Regional Real Estate Board (TRREB), 3,446 condominium apartments changed hands across the GTA in Q4 2023.

Not only has the figure fallen 3.4% on an annual basis, but it marks the lowest quarterly sales number the region has seen since TRREB began publishing condo market data in Q3 2011. At 3,459, even sales at the onset of the pandemic in Q2 2020 were higher.

“The condominium apartment market, like other segments of the homeownership market, experienced a pull-back in activity since the Bank of Canada started hiking interest rates in early 2022,” said TRREB President Jennifer Pearce.

“However, looking forward, borrowing costs are expected to trend lower this year and next. This will improve the affordability picture for many first-time buyers, so the condo market is poised for improvement in 2024.”

After having paused interest rates at 5% for four consecutive meetings, the Bank of Canada is expected to start cutting rates by mid-year.

While condo sales sunk, new listings shot up in Q4, rising 29.3% annually. The divergence between the two measures helped create more balance in the condo market, which in turn led to faltering prices.

The average sale price for a condo in the GTA sat at $702,142 in Q4, a 1.1% annual decline. In the City of Toronto, where more than two-thirds of the region’s sales took place, the average price dipped 2.4%, to $720,456.

However, Toronto is not home to the priciest condos in the GTA — such a designation belongs to Oakville, where the average sale price in Q4 was $955,004.

While Stoufville ($926,721), King ($925,000), Scugog ($845,000 ) and Caledon ($724,667) also boast higher average condo prices than Toronto, the figures are based on fewer than 10 sales.

Toronto Regional Real Estate Board

In contrast, the most affordable condos in the GTA can be found in Oshawa, with an average sale price of $461,858. Although slightly lower, at $440,000, East Gwillimbury’s average condo price is based on only three sales.

“Condominium apartment prices remained relatively flat over the past year. Buyers had plenty of negotiating power given the level of supply in the marketplace,” said TRREB Chief Market Analyst Jason Mercer.

“As we move through 2024, demand for condominium apartments should pick up. Expected decreases in borrowing costs coupled with high average rents could prompt more households to purchase a home over the next year. Condominium apartments are a key entry point into the ownership market.”

Real Estate News