The Greater Toronto Area builds a lot more condominiums than purpose-built rental units. This isn't the case everywhere though. I was recently reading an article about Salt Lake City and how developers there don't want to build condominiums. It's mostly rental housing. There's simply too much risk and liability with condominiums. I guess this is one of the reasons why real estate is often said to be a local business.
In any event, because of this dynamic in Toronto, condominium rentals are often used to measure the health of the overall rental market. There are simply more recent comparables to point to when you're trying to figure out what is "market." The Toronto Regional Real Estate Board recently published its Q2-2021 rental market report and here is what they found when it comes to condominium apartment rental transactions in the Greater Toronto Area:
Q2-2021 - 14,920 transactions
Q1-2021 - 13,168 transactions
Q2-2020 - 7,300 transactions
What this report tells us is that rental demand is returning. Transactions and rents are up compared to the first quarter of this year and certainly compared to Q2 of last year (2020), which was the low point of this pandemic. We are not yet back to where we were in Q1-2020 when the city was firing on all cylinders, but I have no doubt that we will get there and ultimately surpass those figures.
For the full rental market report, click here.
Photo by Narciso Arellano on Unsplash
https://youtu.be/i_PFn-1SFgY
CIBC Deputy Chief Economist Benjamin Tal was recently interviewed by Larysa Harapyn of the Financial Post about the state of the housing market in the Greater Toronto Area. The message he delivers is pretty clear: "If you think that Toronto is unaffordable now, you wait." The long-term fundamentals in this market remain strong. Demand is outstripping supply and will likely continue to do so, which is why Tal also stresses the importance of delivering more purpose-built rental housing. If you can't see the video above, click here. (And with that, I think it's time to switch topics for tomorrow's post. That's enough Toronto housing for one week.)
The Toronto Regional Real Estate Board released its 2020 housing figures this week. And I suspect that the numbers are probably directionally similar for many city regions around the world.
2020 saw more home sales than 2019 with 95,151 homes changing hands. This represents an 8.4% increase compared to last year. December was also a record month with 7,180 sales -- a 65% year-over-year increase!
The average selling price in the Greater Toronto Area also reached a new record of $929,699. This represents a 13.5% increase compared to last year. Once again, December was a record setting month with an average selling price of $932,222.
When you look at sales and average prices by home type, the biggest drivers were low-rise homes outside of the city. No surprises here.
The Greater Toronto Area builds a lot more condominiums than purpose-built rental units. This isn't the case everywhere though. I was recently reading an article about Salt Lake City and how developers there don't want to build condominiums. It's mostly rental housing. There's simply too much risk and liability with condominiums. I guess this is one of the reasons why real estate is often said to be a local business.
In any event, because of this dynamic in Toronto, condominium rentals are often used to measure the health of the overall rental market. There are simply more recent comparables to point to when you're trying to figure out what is "market." The Toronto Regional Real Estate Board recently published its Q2-2021 rental market report and here is what they found when it comes to condominium apartment rental transactions in the Greater Toronto Area:
Q2-2021 - 14,920 transactions
Q1-2021 - 13,168 transactions
Q2-2020 - 7,300 transactions
What this report tells us is that rental demand is returning. Transactions and rents are up compared to the first quarter of this year and certainly compared to Q2 of last year (2020), which was the low point of this pandemic. We are not yet back to where we were in Q1-2020 when the city was firing on all cylinders, but I have no doubt that we will get there and ultimately surpass those figures.
For the full rental market report, click here.
Photo by Narciso Arellano on Unsplash
https://youtu.be/i_PFn-1SFgY
CIBC Deputy Chief Economist Benjamin Tal was recently interviewed by Larysa Harapyn of the Financial Post about the state of the housing market in the Greater Toronto Area. The message he delivers is pretty clear: "If you think that Toronto is unaffordable now, you wait." The long-term fundamentals in this market remain strong. Demand is outstripping supply and will likely continue to do so, which is why Tal also stresses the importance of delivering more purpose-built rental housing. If you can't see the video above, click here. (And with that, I think it's time to switch topics for tomorrow's post. That's enough Toronto housing for one week.)
The Toronto Regional Real Estate Board released its 2020 housing figures this week. And I suspect that the numbers are probably directionally similar for many city regions around the world.
2020 saw more home sales than 2019 with 95,151 homes changing hands. This represents an 8.4% increase compared to last year. December was also a record month with 7,180 sales -- a 65% year-over-year increase!
The average selling price in the Greater Toronto Area also reached a new record of $929,699. This represents a 13.5% increase compared to last year. Once again, December was a record setting month with an average selling price of $932,222.
When you look at sales and average prices by home type, the biggest drivers were low-rise homes outside of the city. No surprises here.
But consider the price spread that now exists between condos and detached homes. In the City of Toronto ("416"), we're talking about an average price delta of nearly $850k. That would be an expensive home in many other markets.
Of course, condos tend to be smaller than detached homes. And so different prices per pound. But total price matters a great deal and historically a widening spread has moved many buyers over to the condo market.
I suspect we will see that happen again this year.
But consider the price spread that now exists between condos and detached homes. In the City of Toronto ("416"), we're talking about an average price delta of nearly $850k. That would be an expensive home in many other markets.
Of course, condos tend to be smaller than detached homes. And so different prices per pound. But total price matters a great deal and historically a widening spread has moved many buyers over to the condo market.
I suspect we will see that happen again this year.
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