After facing a year of slow sales and halted projects, the condominium market in the biggest Canadian city is displaying signs of improvement. Attracted by reduced prices, Tyler Florian managed to purchase his first property in February – a two-bedroom condo in Fort York, a densely populated neighborhood in downtown Toronto. Florian, a 29-year-old financial planner, had been residing with his parents previously. He deliberated between moving downtown and renting or waiting another year to amass enough savings to buy a property.
Utilizing the First Home Savings Account and the RRSP Home Buyers’ Plan, along with lower interest rates, Florian successfully acquired his initial property. He mentioned that it was a favorable time for individuals looking to enter the market, although uncertainty persists regarding whether it has hit the bottom. Realtor Thomas Delespierre noted a shift in Toronto’s condo market from a seller’s market to a buyer’s market, with condos now remaining on the market for extended periods, allowing buyers more negotiation leverage.
Recent data from the Toronto Regional Real Estate Board (TRREB) indicates a potential end to the condo market downturn, with a 14.4% year-over-year increase in units sold last month. Despite this, condo prices continued to decline by 6.4%, averaging just over $665,000. TRREB’s chief information officer, Jason Mercer, attributed the increased activity in the housing segment to lower prices and borrowing costs. Mercer warned that heightened buyer competition could drive condo prices back up, especially with a decrease in new unit constructions.
The trend of declining prices and sales isn’t limited to Toronto but extends to neighboring suburbs and municipalities in Ontario’s southwest. The Canadian Real Estate Association’s data reveals a drop in condo prices across the country, with Greater Toronto Area prices falling by approximately 25% since their peak in 2022. In contrast, Montreal has seen steady growth in condo prices over the past three years.
The Daniels Corporation, a prominent real estate developer in Toronto, currently has four condominium projects under development, a decrease from previous years. The company’s president, Jacob Cohen, highlighted a shift in unit mix towards larger-sized units, catering to evolving buyer demands. Cohen emphasized that there remains a demand for smaller units, particularly among students and young professionals.
Amidst cautious optimism, real estate developers like Pouyan Safapour are hopeful about future projects, with pre-construction sales for his upcoming building set to commence. The market is witnessing a shift away from investor-buyers towards end users, posing challenges in reaching sales thresholds for project financing. Despite the challenges, developers are adapting strategies to attract end-user buyers, viewing this market correction as an opportunity for positive change.
