With Toronto Areacondo sales down 26% in April 2018, many buyers are wondering why the condo market is still incredibly competitive and prices are still up.
One of the big reasons we’re not seeing a cool down in the condo market in spite of falling sales is because the number of new listings (condos up for sale) has also been on the way down. The chart below shows the number of new condo listings that came on the market between January and April since 2010.
Not only are the number of condo listings down over last year, they have been trending down since 2015 and are currently at their lowest level since at least 2010.
Annual new condo completions have been above the 10-year average since 2015 which suggests that the recent decline in new listings is not because of a decline in new construction supply. While it’s difficult to say why new listings for condos are down, my instinct is that a larger number of people who are upsizing from their condo are deciding to hold on to their current unit to rent out as an income property rather than putting it up for sale.
If this is the case, it’s bringing some much-needed supply to the rental market but is making the market more competitive for anyone looking to buy a condo.
Since July 2017, condo prices have been trending up because the number of condos available for sale, relative to the demand, has been trending down. It’s this imbalance between supply and demand that has kept the market for condos very competitive and has pushed prices higher.
Until we see condo sales fall further or the number of new listings increase the market will continue to be competitive.
John Pasalis is the President and Broker ofRealosophy Realty Inc.Brokerage in Toronto. A leader in real estate analytics and pro-consumer advice, Realosophy agents help clients buy or sell a home the right way.