“It’s a good time to be a condo investor” likely could already be the understatement of the year.
According to recent research study outlined in the Financial Post, Toronto condo rental rates have risen almost 12% in 2016, with the year ending average rental rate sitting at $2.77 per square foot per month.
A decrease in the supply of condo inventory is mostly to blame and this descending trend appears to be one that will continue on into the rest of 2017.
According to the Toronto Real Estate Board, the number of condos leased in the GTA dropped over 2% in 2016 marking the first time there has been a drop in rental listings in almost 10 years.
Tied to this is the increasing trend of existing condo owners selling their rental properties, moving the investments into one or several pre-construction condo units. The share of total condos in the GTA rented last year dropped to 8.5% from 9.3% a year earlier with the share of total units sold rising from 7.1% to 8.1%.
Finally, the rising price of single-family homes is driving more and more investors and homebuyers into the condo market. Existing home prices rose over 17% in 2016, accompanied by a catalytic decreasing trend in new home supply.
All of these trends seem to point to condo ownership in Toronto being a very wise move. No one knows how long this highly sloped increase in all factors will continue, but at the moment it is very difficult to make a bad case about investing in a new or pre-constriction condominium.