The construction of new condos is booming in Toronto, but that doesn’t necessarily mean sales are soaring.
According to a new report by Urbanation Inc., condo apartment sales in the City of Toronto declined by 12 per cent year over year in Q2 2019. This is the lowest second quarter the city has seen since 2009.
In comparison, sales outside the downtown core shot up 77 per cent in the same time period. Specifically, Scarborough, Etobicoke, and North York saw their sales double from the previous year, and condo units in the 905 region (such as Hamilton and Oshawa) rose by nearly 150 per cent. The 905 now makes up 58 per cent of GTA sales, which is a new record. In Q2, they sold more than 5,100 units.
The reason buyers are so interested in areas outside the downtown core is price. The average condo in the City of Toronto sells for $1,291 per square foot (psf). Conversely, units in the outer 416 areas, such as Scarborough, go for $894 psf, while units in the 905 region go for $740 psf.
But it’s not solely about price. The outer 416 and 905 municipalities are also popular because they’re accessible by transit. That means people can live outside the city, but still easily commute to work every day.
A previous study by Zoocasa supports Urbanation’s findings that the cost of homes are more affordable the further they are from the city. Homes near Etobicoke North Go Station, for instance, have a commute time of roughly 26 minutes and cost an average of $545,152. Prices by Union Station, however, have a much higher average of $713,507.
Low borrowing costs, a healthy job market, and tight resale conditions are also responsible for the rise in GTA condo sales, according to Urbanation. On top of that, high development costs and investor fatigue have deterred potential buyers from purchasing condos in the City of Toronto, the report noted.
But low sales doesn’t mean people aren’t interested in living in the 6ix. Studies have found that Toronto is the fastest-growing city in Canada and the U.S., and is also the No. 1 city Canadians want to move to for real estate.