Mounting development costs along with geographic limits are placing the Toronto condominium segment’s relative affordability at risk, according to a new market report by RE/MAX of Ontario-Atlantic Canada Region.
Robust immigration and population growth have galvanized demand to the point where resale condos (along with townhouses) now represent almost 37% of total residential activity in the GTA, but this boon for the industry might also prove to be a double-edged sword.
“The necessity to ‘build up’ has never been more prevalent in a city that has seen its population climb from one census to the next,” RE/MAX of Ontario-Atlantic Canada Region executive VP and regional director Christopher Alexander said.
The onus is upon the regulatory side to remedy this ticking time bomb, he argued.
“To prevent the run-up we’ve seen in housing values in the past, all levels of government must work together with developers to streamline the building process. We need to create more affordable GTA housing options that can accommodate buyers and renters at every price point,” Alexander explained.
Read more: Rental demand to boost further apartment construction – CMHC
The market pressure is evident when one considers that the city’s condo apartments keep getting snapped up by hopeful home owners and investors alike, despite the average price increasing by almost 8% year-to-date to reach $551,761 (compared to $512,552 during the same period in 2017).
“The condominium lifestyle continues to resonate with buyers in the Greater Toronto Area for a number of reasons. While the affordability aspect is first and foremost, we’ve also a seen strong investor presence in recent years,” Alexander stated.
“Limited inventory continues to place substantial upward pressure on prices, with fewer affordable housing options available—and that includes condominium rentals.”
GTA rents continue surge
Toronto’s multi-residential segment sees record-high sales
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate