The recent news from the Conference Board of Canada regarding Toronto’s condominium market validates what we at Baker Real Estate have been saying for months – that low interest rates, strong immigration and the downsizing of baby boomers will keep things on an even keel for some time. The simple fact is that single-family homes in the Greater Toronto Area are out of the financial reach of many buyers. In July, the average price was over $508,000, so it’s no surprise that when it comes to sales, single-family homes continue to take a backseat to condominiums. Condos remain a viable alternative, especially for many of the 100,000 people who migrate to the GTA each year.
Of course, our mortgage rules are stricter now and economic growth has been modest, but the drop in sales because of these circumstances will be gradual. Even if interest rates rise, predictions are that they will stay relatively low for quite some time. And let’s face it – these rates are still phenomenal. In addition, according to the study, condo prices will most likely rise 1.3 per cent this year, then 2.5 per cent in 2013 and an average of 3.6 per cent from 2014 on, which is a slow, steady, healthy gain.
In the report, the inventory of 800 unsold condos across the GTA is predicted to grow by about 25 per cent over the next two years as new residences come onto the market. Again, this is a far cry from the drastic situation in 1992, when there were 2,340 unsold units. Things are looking great.
I’ve said it dozens of times – everything in this market is relative, and it is gratifying to see this kind of good news in the media challenging the “bubble” theory. Condominiums are and will be a fabulous lifestyle and financial investment for years to come!