Toronto condos are the only market segment to show price growth this April, as detached, semis and townhouses all declined from April 2017, according to the Toronto Real Estate Board.
Condos in the 416 rose 3.8 per cent year-over-year to reach an average selling price of $601,211. Detached houses, on the other hand, fell 14.3 per cent, but remain well over a million dollars, at $1,354,719. Similarly, semi-detached houses fell in price by 7.8 per cent, but refuse to budge below the million dollar threshold, at $1,021,986. Townhouses remain stable, growing a fraction of a per cent, 0.2, to $792,180 .
Affordability makes condos an obvious option for new homebuyers
Condos appear to remain an affordable entry point to home ownership for the majority of Torontonians, and that’s likely why they continue to buck the trend of declining prices. April 2018 marks one year since the Ontario announced its Fair Housing Plan, with 16 measures designed to combat the seemingly overheated housing market. Many predicted that the regulations, like instituting rent control on units built after 1991, would diminish investors and speculators attraction to purchasing condo units to rent out.
Another announcement, by OSFI, the bank regulator, was also predicted to slow down condo sales. Starting January 1 of this year, borrowers who get a mortgage from a federally-regulated lender must be qualified at either the five-year benchmark rate published by the Bank of Canada or at an extra 2 per cent on top of their contract mortgage rate – whichever is higher. Borrowers, who last year could have more easily stretched themselves into a condo, are this year likely to have a far tougher time finding a lender to finance their dreams of property ownership.
These two major changes to the housing market did, in fact, massively affect condo sales. Just 1,574 units were sold in April compared to 2,148 last year, a decline of 26.4 per cent. That’s in line with all other property types, sales in all falling by double digits.
Those who could have bought in the city last year, may now be jumping ship to Toronto’s suburban neighbours. While detached houses for sale in Mississauga still pose major affordability challenges, at $1,098,911, for example, Mississauga condos remain under half a million mark at just $435,254.
We’ll have to wait and see if activity picks up, as we’re only at the beginning of the traditionally busy spring and summer period. For now, however, condo price growth is the only bright spot in TREB’s April report. Check out the infographic below to get the details:
This post was created in partnership with Zoocasa.com, a leading real estate resource that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse condos, townhouses and houses for sale in Toronto.