The number of rented DuEast condos in Toronto hit an all-time high in 2016. Also, the number of listings rose by a greater degree in the same year. According to annual reports released in 2013, rents grew by less than 1 percent. An average size unit was rented out at $1,787.
Further analysis showed that rental listing increased steadily at an average of about 25% per year since 2012. However, despite the increase in rental listing, the demand for condos steadily increased through 2016 because of the following factors:
- The growing population
- Children who finished schools and wanted to move into their own unit
- Improved job opportunities
According to census data, people are moving towards areas that are densely populated because of the cost of commuting and the time spent on commuting.
In 2016, most of the newly constructed condos were sold to first time buyers. This is one of the reasons why there was no noticeable fall in prices of condos.
Foreign Condo Ownership
The rate of foreign ownership in the condo market is dropping according to the 2016 report released by CMHC. The survey showed that only 2.3 percent of the condos were owned by foreigners. This was a few points down compared to 3.3 percent registered in 2015. Normally, foreigners purchase condos not for flipping purposes but for holding reasons. Therefore, the only reason that could explain the drop in the number of foreigners buying condos is that most of them were relocating to other areas due to increased scrutiny by the policymakers.
However, other reports from national housing agency suggest that there was no drop in the rate of foreign ownership in Toronto. Even though, there are reports that the government is closely monitoring the condo market and plans to introduce the foreign buyer’s tax. Analysts think that a foreign buyer’s tax will not affect the condo market because foreigners have an option of buying condos through the locals. Also, most of the condos are bought by investors who have no intention of keeping them. Instead, they are buying condos for speculative purposes.
How Housing Affordability Is Driving The Condo Market In The Wider GTA.
The condo market showed more strength in 2016 than it did in other years. It has been noted that there has been a surge in condo apartments in the wider GTA. The number of both new sales and re-sales has increased compared to what was recorded in 2015. According to the market representatives, it has been noted that the composition of demand has evolved as well. A strong population and an increase in employment opportunities has contributed to the rising demand. Also, there is evidence that move up buyers are influencing the demand for condos.
In 2016, it was noted that the resale prices for the detached homes went up by $1.3 million while the semi-detached units were sold at an average of $ 835,000. This has forced many buyers to consider buying condos because they are relatively cheaper. At a high of $200,000 per unit, buyers are finding condos relatively affordable.