In the Greater Toronto Area, supply scarcity is a major force driving home prices upward, according to Tom Storey of Royal LePage Signature Realty.
“Low inventory levels are putting upward pressure on price per square foot in the Greater Toronto Area, especially for entry-level properties like condos,” Storey explained.
From January to July of this year, the aggregate price across all housing types went up by 6.1% annually to $782 per square foot.
During this period the median price of Toronto’s condos had a 9.1% annual uptick, up to $743 per square foot. This had made it noticeably more difficult for more households to afford the property type.
To compare, single detached homes had a far lower 1% year-over-year increase, up to $486 per square foot.
Among the most active market participants are starting households and young professionals, who would rather live in a constricted condo over a detached home if it means greater access to work and amenities.
“Millennials know what they want and, in some cases, are willing to pay more for less space in order to be in their desired neighbourhood. This is consistent with the trend of location being an increasingly important aspect of home ownership in today's market,” Storey said.
Royal LePage data indicated that in the city of Toronto, condo units had a median floor area of 752 square feet, roughly half that of single-family detached homes (1,512 per sq. ft.).
Moving from condos in the downtown core to those in the rest of the GTA only has a 4% increase in the median living areas (783/sq. ft.). On the other hand, the increase in the single-family detached segment would’ve been around 32% (2,000/sq. ft.).
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