Toronto is experiencing a condo boom because of various factors. Despite the new regulations that make owning a house tricky, there’s a rapid pace of building condos. This has created new investors afraid of going into the market because they can’t fathom the Toronto condo boom. Our real estate experts will determine the factors responsible for this boom in the Toronto market.
Toronto Condo Boom
There seems to be no drop in the building of condos in Toronto, even with the new rules passed by the city. According to housing experts, the rapid increase in condo building results from the economic backdrop. Below are some of the factors that cause the real estate boom in Toronto.
Demand for Listings
The demand for listings has increased since the start of 2021, as sellers listed their properties more. This is partly due to the ease of lockdown and the coming of the vaccines, as they suspect more people will move into the city. Apart from that, the search for accessible condo areas has increased demand.
Areas like Downtown Toronto have an average of 7.79% turnover. This turnover rate has made developers build more condos in the area and list their properties.
Growth of Population In the City
Toronto has witnessed a growth in population in the past few years. Toronto’s population grew approximately three times more than Phoenix. The reason for this splurge is the increased number of tech jobs.
Toronto city created more jobs than Seattle and Washington DC combined, and that says a lot. The employment opportunities and the population increase resulted in the demand for housing.
Convenience of Condos
One reason people prefer to buy a condo even in Canada is because of convenience. Most condos are located in excellent areas where you can have easy access to lots of things. In addition to that, condos, especially the new ones, have great amenities and relaxation spots, and the good thing is you only have to pay a fraction of the cost.
Number of Pre-Sold Condos
This is another factor that plays a crucial role in the Toronto condo boom. People love new things, and with the growing number of new constructions, investors prefer to invest in new houses instead of old buildings. As a result, it led to a significant shift in the turnover of buildings built before and after the new millennium.
Buildings constructed before 2000 had a turnover of 3.40%, while buildings been built after 2000 had a turnover of 6.62%. It indicates that people prefer investing in new condos. Because of this, investors purchase pre-condos intending to sell them to maximize their profits.
Endless Building Constructions In the City
As of the first quarter of 2021, the construction of condos in Toronto is an all-time high. According to reports on the Toronto real estate market, over 100 cranes are used in the Downtown region of Toronto. In addition, the results declared by Urbanation in the first quarter of 2019 stated that around 71,378 units developed, almost 10,000 more than the previous year.
While there’s an ongoing construction of houses in Toronto, construction costs have also increased, especially in the Greater Toronto Area. It made developers plan with caution. Still, there hasn’t been a cause for concern for the number of condo developments canceled so far, suggesting that constructions are ongoing throughout the city without any issues.
Mortgage Rates
The mortgage rate in Toronto has remained low, making it relatively easy for investors to purchase condos in the city. However, the new mortgage stress tests introduced in 2020 didn’t bring down the prices of condos, so you shouldn’t expect to purchase a condo at a lower price.
Toronto's Economic Resiliency
Toronto has faced economic recessions in the past, but its economic resiliency has kept the condo market prices high [1]. As a result, it has contributed to the real estate boom in the city.
FAQ
Are condo prices going down in Toronto?
No, condo prices in Toronto are not going down. On the contrary, our housing experts expect condo prices to rise in Toronto, as the introduction of vaccines and the movement of people into the city have indicated an upward trend. However, prices will remain lower than in previous years. Condo prices witnessed an 8.5% decline in October 2020 due to the pandemic.
Why does Toronto keep building condos?
Toronto keeps building condos because of the population increase in the city and closeness to the center. People moving into the city, especially the younger generation, prefer houses at the center of activities. In essence, they prefer to invest in homes closer to their workplace, making transportation convenient and saving costs.
Conclusion
The current Toronto condo boom is happening because of many factors, as explained by our house experts. With low mortgage rates, an increase in tech jobs, and the growing number of condo construction, property prices will continue to rise. Thus, now might be the perfect time to invest in the Toronto condo market.
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