New Condos in Toronto have continued their popularity over the past 5 years, which is apparent by the amount of new condo buildings that are still being built. While many analysts and investors were initially leery of the continuous building, they have been corrected by the latest data, which shows the average prices of new condos has increased by seventeen percent from the previous year.
In a February 29th report on housing affordability, an RBC economist stated, “Condo prices have posted respectable gains despite earlier concerns about the risk that the condo construction boom might flood market supply.”
A couple of years ago, the experts also warned that any increase in construction would end poorly. They were wrong.
Back in June of 2013, the Bank of Canada warned that developers had “boosted construction in the condominium market beyond demographic requirements”. This was when approximately 55,000 new condos were being built, with the bank therefore being concerned about overall market stability.
Even with those concerns, it has since been proven that the market has remained very sturdy. In many areas prices have climbed nine percent since these statements were made.
This contrasts with the more than 25 per cent surge in detached two-story homes over the same time, leaving it now looking like the area most prone to a potential price correction.
There are many reasons why condos are continuing to sell relatively well. Most people do not want to commute long distances to work and they don’t want a lot of property upkeep, Hence they decide to live closer to the downtown.
Also, as single-family homes are becoming out of reach for most, many people are leaning towards new condo ownership. The new mortgage rules that were recently implemented are also making it extremely difficult for first time homebuyers to purchase stand-alone dwellings.
The migration from western provinces into Ontario has also put upward pressure on an already tight regional condo rental market, experts say, making the job of finding tenants to fill new condos even easier for investors in Toronto based condominiums.