The housing of the future could look much different than that of the past if the current Ontario housing market is any indication.
Historically, more traditional dwelling types such as single-detached homes, semis, and row houses have performed best in the Ontario housing market. However, now there’s a new titan rising above the rest: condos.
The Toronto condo market is booming. The September 2017 Teranet Market Insights report: https://www.teranet.ca/wp-content/uploads/2017/10/Teranet-Market-Insight-Report_Sept20179.pdf revealed the figures.
On a year-to-date basis, row houses in Ontario decreased by 16.3%. Single-attached homes decreased by 13.9%. And single-detached homes decreased by 14.6%. The only property types to maintain positive growth were condos and multi-family properties. Condos were up in YTD volume by 0.8% and multi-family homes were up by 6.6%.
In YTD price growth, condos blew all other housing types away. Single-detached homes were down 1.3%, row houses decreased by 2.3%, and single-attached homes dropped 4.6%. Multi-family home price volumes rose by 4.8%. But condos took the cake with an increase of 8.9%.
According to the Toronto Star, the average condo price in the GTA in July 2017 was $665,041. Condos accounted for 92% of new home sales in July. And condos also got bigger, averaging 871 sq. ft., compared to 801 sq. ft. in 2016.
The Toronto Star also reported that the number of condos sold was down 35% year over year, but the year-to-date sales volume increased 51% and is double the 10-year sales average — a stark contract to new single-family home sales, which decreased 50% year-to-date in July.
BuzzBuzzNews Canada reported that 35 condo developments are set to launch in the GTA this fall.
Why are condos faring so well? We have some possible reasons:
- Condos are the most affordable type of housing available in the GTA. In downtown Toronto, for example, you can still get into a condo for $600,000 while you would hard pressed to find a detached home, or even a townhome for that matter, under $1 million.
- With interest rates going up, people want to downsize their homes and mortgages.
- With larger down payments being required on purchases of more than $500,000, a condo is less expensive with respect to down payment and closing costs.
What does this mean to you? If rising interest rates and increased mortgage regulation is leading Canadian homebuyers and homeowners to tighten their purse strings, perhaps the Toronto condo market is a good one for lenders to focus marketing their lending products towards. You may, however, want to scale back efforts in areas that have become unaffordable for most.
Purview for Lenders can help you access high-quality property information about the Ontario housing market.
Call us today at 1.855.787.8439 or visit www.purviewforlenders.com.