With the economy improving and vaccines accelerating, buyer confidence in Toronto's condo market has improved "substantially," with condo sales up nearly 80% in Q1-2021, though average condo selling prices remain below pre-COVID levels.
On Thursday, the Toronto Regional Real Estate Board (TRREB) said condominium apartment sales well outstripped growth in listings in the Greater Toronto Area (GTA) year-over-year in the first quarter of 2021.
With market conditions tightening, average condo prices for Q1-2021 were above the averages for Q1-2020 for the regions surrounding Toronto, though the average condo selling price in Toronto remained below last year’s level.
The overall GTA average condominium apartment selling price was down by 1.4% year-over-year in Q1-2021 to $645,219. However, the board pointed out this was entirely driven by a 4.6% decline in the average selling price in Toronto, which fell to $675,844.
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According to the board, condominium sales totalled 9,398 in Q1-2021 -- up 79.8% compared to 5,226 in Q1 2020. The number of new listings during this period amounted to 11,373 -- a 42.8% increase over the year before -- while active listings totalled 2,811, an increase of 23.6% compared to the end of Q1 2020.
The board said the condo market has been slower to recover compared to the low-rise market segments, where sales and prices have been soaring for most of the last year. But there has been an upswing in interest this year, said TRREB president Lisa Patel.
“This interest will likely continue to increase as the economy improves and vaccine take-up accelerates, resulting in more confidence for first-time buyers,” she said.
Condo sales in Toronto accounted for a majority of the region's sales activity in Q1-2021, with 6,475 transactions recorded, with an average price of $675,844, down from the $708,298 recorded in Q1-2020.
During this same period, condo rents also declined on an annual basis -- down 16.8% for one-bedroom units that averaged $1,820 the first quarter of this year, compared to $2,187 in the same period last year. Two-bedroom condo rents fell 13% to $2,447 this year, down from $2,812. The board said bachelor units that were renting for $1,843 a year ago plunged 24% to $1,404.
“Average rents continued to be down on a year-over-year basis, as the supply and therefore choice for renters remained very high from a historic perspective," said TRREB Chief Market Analyst Jason Mercer.
"However, if growth in rental transactions continues to outstrip growth in listings, market conditions will become tighter as we move through 2021 and even more so in 2022 as immigration and non-permanent migration rebound,” said Mercer.
The 13,168 rentals recorded this year were a first-quarter record, likely a result of pent-up demand from last year, said Patel. This represented an increase of 81.6% compared to 7,251 rentals in Q1-2020.
The number of condominium apartments listed for rent during Q1-2021 was also up by 78.8% compared to Q1-2020.
"Strong rental demand is also an indicator of broader economic recovery with people willing to sign rental agreements because they are confident in their future job and income prospects,” added Patel.
