TORONTO – If you were on the lookout for a Greater Toronto Area condo or apartment to rent or own late last year, new data from the region’s real estate board shows you might have had an edge in negotiations.

The number of condos listed for sale or rent in the area in the fourth quarter of 2020 were up by double and sometimes triple digits from the year before, while prices were down, according to two reports released by the Toronto Regional Real Estate Board on Wednesday.

“The increase in supply…resulted in much more choice and bargaining power for buyers and a moderate decline in average selling prices,” TRREB president Lisa Patel said in a statement.

Patel also noticed the market tipped in favour of renters, who had plenty of properties that sat on the market for weeks or months to choose from.

Her observations encompass the last few months of 2020 – a period when the Greater Toronto Area was staring down tougher COVID-19 lockdowns, the looming possibility of a tax on vacant units and a softening of the short-term rental market triggered by travel bans and work from home orders.

TRREB said condo and apartment sales in the quarter reached 6,469, up 20.7 per cent compared to 5,358 in 2019. New listings climbed by almost 92 per cent to hit 12,298, up from 6,407 in the year prior, while active listings doubled to reach 4,294.

The average selling price fell 1.1 per cent to reach $610,044 in the quarter, down from $616,771 a year earlier. Average selling prices in the city of Toronto decreased 2.4 per cent to $644,516.

Davelle Morrison, a Toronto broker with Bosley Real Estate Ltd., noticed the period was a reversal from the usually sleepy December holiday season.

“Towards the end of December people just decided to start snapping up what they could,” she said.

“One of the reasons why December is usually so dead is because everybody’s at Christmas parties and shopping for Christmas gifts, but now, because of COVID, you’re not doing any of those things, so all they were doing is looking at real estate.”

Meanwhile, demand for condo rental was reaching record highs, Patel said.

TRREB’s new data showed 12,584 condos were rented in the quarter, up by about 86 per cent from the 6,756 rentals in the same period last year. The number listed for rent soared by 131.6 per cent, rising from 33,280 and 14,371.

“Growth in the number of available units far outstripped growth in rental transactions, as many investors chose to make their units available due to the impact of COVID-19 on tourism and the short-term rental market,” said Patel.

Those who offered places for rent ended up charging less for rent than they would have a year ago. The average one-bedroom condo rent unit was down by 16.5 per cent year over year to $1,845 compared to $2,209. The average two-bedroom condo rent was down by 14.5 per cent over the same time period to $2,453 compared to $2,868.

That pattern seems to be continuing in 2021, Morrison said,

“I have a few clients right now where their properties are vacant because we just can’t even get tenants in them,” she said.

“It’s on my to do list to try to get to take another price cut.”

But her clients on the market for houses are having a harder time.

Prices are soaring and people are scrambling to make offers.

Morrison has heard of houses in Mississauga getting 70 offers, ones in Durham Region getting 30 offers, and places in Toronto getting 18 offers.

Bully offers are becoming common too, she said.

She believes the time to buy houses was when the pandemic first hit and sellers were feeling skittish about the uncertain times, but condo buyers still have a window of opportunity.

“If you want to buy a condo you should have bought it in December, but really now is the absolute time to get in there and buy something because I think the second that the borders open up and people get vaccinated, the condo market is going to take off again.”

New single-family home sales across the Toronto region skyrocketed in 2020, mirroring the shift in buyer preferences that played out in the resale market last year.

Data for the full year published today by the Building Industry and Land Development Association (BILD) showed buyers scooped up 16,973 new single-family homes in 2020. That’s 81 percent higher than the total achieved in 2019 and 25 percent above the 10-year average for the region.

The single-family homes category includes new detached, linked and semi-detached homes and townhouses, according to BILD’s data partner Altus Group.

The relative sluggishness in the high-rise market meant overall new home sales rose a more modest five percent last year compared to 2019. The total number of new homes sold across the Toronto region was 37,669, with condo sales making up 20,696 of the total. Condo sales, which include units in new low-, mid- and high-rise buildings were down 22 percent from a year ago and came in 11 percent below the 10-year average.

While it was clear that single-family home demand kept new home sales from plummeting in 2020, Altus Group said the annual total showed the Toronto market’s resilience.

“Looking back at 2020, the resilience of the GTA new home market was very evident, highlighting the underlying demand for housing in the face of economic uncertainty,” said Altus Group’s Ryan Wyse in a media release.

“Given the significant changes brought on by the pandemic, the industry and consumers were able to adapt quickly, and the result was an overall increase in sales compared to 2019, with a particular focus on single-family options,” he added.

Looking back at December data, BILD President David Wilkes noted that new home inventory was relatively low by the year’s end. Available new home inventory in the Toronto region sat at 13,171 units in December, the lowest level recorded since March 2018.

“A healthy new home market should have nine to 12 months’ worth of inventory but due to the disruptions brought about by the pandemic, we currently have only about four months’ worth, based on the pace of sales in the last year,” said Wilkes.

  • Yonge and Sheppard may be situated toward Toronto’s outskirts, but the location is an excellent spot to invest in Condo.
  • King West can be referred to as a hip and trendy area.
  • CityPlace is situated West of Bathurst Street and accommodates a home landing park.

Investing in Toronto real estate industry is one of the lucrative investments to watch out for in 2021. Being the largest city in Canada, Toronto’s real estate market has proven to be profitable for investors due to its competitive friendliness, technological advancement, high-security level, a booming economy, among other factors.

Toronto Condosoffers varying features and pricing for different people, and its availability across districts and towns gives investors multiple options of most-sought-after places to invest in. CondoMapper International allows real estate investors to purchase houses in Toronto at relatively affordable prices.

Hence, this article entails a list of seven Toronto locations for you to choose from when considering condominiums to invest in. For instance, you can invest incondo apartments in areas like Grand Trunk Cres, John St, Bloor St W, Rathburn Rd, Webb Dr-Unit, Kingston Road, and Abell St.

Best Places to Invest

1. Downtown Toronto

Over an extended period, Downtown Toronto has been a superb place for people to invest in the Condo. Real estate in Toronto has high appreciating value and great demand in the rental world. That is why a large number of condo investors in Toronto can rent out their spaces remarkably quickly.

The condos in Downtown Toronto go through a 10% appreciation in value per year compared to average Toronto apartments that do not appreciate much in value.

2. Yonge and Sheppard

Yonge and Sheppard may be situated toward Toronto’s outskirts, but the location is an excellent spot to invest in Condo. It is one of the Prime addresses in North York for rentals (condos and houses) and among the areas witnessing rapid condo development, with the slightest possibility of slowing down.

Because it is located far north, you will find competitive prices, increasing condo owners, and heightened property demand.

3. King West

King West can be referred to as a hip and trendy area. This neighborhood was a district stuffed with unused warehouses just years ago. It is known to young professionals who would like to live an urban lifestyle as this location comprises some of the well-frequented bar scenes and nightclubs in Toronto.

This area provides a vast array of property options to invest in, with its condos quickly becoming a fascinating residential type. King West has also introduced new streetcars for commuters and residents, thereby making transportation much easier.

4. Yorkville

Yorkville is situated Northside of Bloor Street, with Yonge Street located at its West. It features one of the unique shopping districts in Canada and high-end restaurants and premier hotels. The area is known to harbor International Companies’ offices such as Twentieth Century Fox and IBM and has high-end boutiques like Bulgari and Burberry. So you may find some condos in Yorkvillebeing a little priceyfor their exclusive amenities. Besides, investing here gives hope of high returns on investment.

5. Liberty Village

This is an inclined art district situated South of King Street W. One of the reasons for it being a remarkable area to invest, is its location, as it is not far from the Fashion and Entertainment Gallery of King St. West.

Additionally, its financial institutions are a few minutes away,where you commute via streetcars. It’s a comfortable place to live and work.

In the last few years, the district has also become prominent with renters searching for affordable residential options, mainly because it features an active community and a host of public amenities.

6. CityPlace

CityPlace is situated West of Bathurst Street and accommodates a home landing park. Not far away from Toronto’s financial district, CityPlace has turned out to be an evolving and quick growing district known for its increasing populace and a spur of services and merchants. It is likely to be set up as a top residential area in Toronto upon completion.

The district is nestled between the Gardiner Expressway and Union Station, thereby making it very reachable. It is also in proximity to Liberty Village and King Street W.

7. Leslieville and the Beaches

Both communities are located along Queen Street’s eastern region. At first, Leesville was inhabited by the working class, but it has since matured to occupy people with different income levels and includes restaurant buildings, coffee houses, and art galleries.

Conclusion

CondoMapper International offers prospective real estate investors a convenient means to invest in/purchase condo of choice online that can be sold and rent out later for profit maximization after experiencing a considerable increase in market value. These condos range from as low as $1800 to an average of $200000 – $599999 and as high as $3.1 million.

Therefore, when considering condo investment, have in mind that many factors can contribute to increasing your property’s value when you intend to put it up for sale in the future. Some of these factors include the job prospect and booming economic activities of the town/district, nearness to the road, market/store and banking, security, and social lifestyle.

Millennial-aged Canadians’ frenetic pursuit of ground-related housing played an outsized role in the country’s aggregate home price spiking by 9.7% last quarter over the corresponding period a year earlier, according to Royal LePage.

“Millennials are starting to have their first or even second child—they’re over 35—and our previous research showed they preferred city cores and condominiums, and now they’re looking for homes in the suburbs, like their parents did, with yards,” Phil Soper, president and CEO of Royal LePage, told CREW, adding that the trend began before the COVID-19 pandemic, but work-from-home policies and technology “super accelerated” the trend.

“Low financing costs, a healthy industry overall, and lower house prices definitely help when you move away from the city centre. Even though prices rise faster in places like Oshawa or Burlington, they’re much cheaper than legacy Toronto neighbourhoods.”

Sixty-four percent of the 62 regions in Royal LePage’s House Price Survey and Market Forecast reported annual median price gains of more than 10% for homes with at least two storeys. Canada-wide, the aggregate price of a home was $708,842 last quarter, with the price of two-storey homes increasing by 11.2% year-over-year to $840,628, and bungalows rising 10% to $592,899. Condo prices, meanwhile, only grew by 3.9% to $509,239.

In the GTA, Canada’s largest metropolitan region, the aggregate price of home jumped by 10.4% year-over-year in Q4-2020 to $936,510, with ground-related homes rising by 11.9% to $1,102,155, bungalows increasing 12.8% to $923,047, and condos increasing 3.6% to $593,811.

“Throughout the second half of 2020, buyers were looking for as much space as they could afford. While many buyers shifted their target neighbourhood away from the city centre, so few properties for sale meant that most detached listings saw multiple-offer scenarios,” Debra Harris, vice president of Royal LePage Real Estate Services Ltd, said in the report. “2020 did bring some balance to the region’s condominium market but larger units, often in the greater region, are still in high competition.”

In the Montreal metropolitan area, the aggregate price of homes rose by 12.4% year-over-year last quarter to $487,380, with two-storey homes increasing 13.6% to $619,099. Bungalows surged by 15.3% to $391,493, and condos shot up 8.1% to $367,113.

“We could have seen a price correction if buyers had left the market,” said Dominic St-Pierre, vice-president and general manager of Royal LePage for the Quebec region. “But low interest rates, combined with increased household savings from remote work and new buyer incentives, played a key role in a market that was already highly competitive before the pandemic. In the suburbs and on the Island of Montreal, activity in the single-family segment resulted in double-digit price increases in most neighbourhoods of the Greater Montreal Area.”

The aggregate home price in Greater Vancouver spiked 7.2% during the same period to $1,155,346. Two-storey homes in the region rose by 8.8% to $1,507,279, bungalows increased 6.8% to $1,265,285, and condos saw a 3.3% boost to $662,120.

“Multiple offers were common throughout the fourth quarter and almost every detached home was attracting competitive bids. Buyer confidence is strong and current low interest rates make purchasing even more attractive,” said Randy Ryalls, general manager of Royal LePage Sterling Realty. “Buyers are worried they will be priced out of the market and with our low inventory of homes for sale in the region, prices are expected to go up in the spring.”

Hong Kong has stated that residents are not entitled to consular protection unless they declare a change of nationality. Then they are no longer regarded as Chinese citizens

Ottawa is growing increasingly concerned about the rights of 300,000 Canadian citizens in Hong Kong, after the territory’s government declared that dual citizens must choose the nationality they wish to maintain.

“Canada is aware of the Hong Kong government’s decision to require dual nationals to declare the nationality they wish to legally maintain while in Hong Kong,” said spokesperson John Babcock. “At this moment, we understand that this policy predominantly affects dual nationals serving prison sentences in Hong Kong. Canada has expressed its concern to the Hong Kong government about the possible loss of consular access that this change implies.”

 

China doesn’t recognize dual nationals under its Nationality Law and Hong Kong residents of Chinese descent are regarded as Chinese citizens. The Hong Kong government has stated that residents, around 300,000 of whom hold Canadian passports, are not entitled to consular protection unless they make a declaration of change of nationality. If that process is successful, they are no longer regarded as Chinese citizens – but it may affect their right of abode in Hong Kong, which allows people to live and work in the territory without restrictions. Foreign nationals can only acquire right of abode after a seven years residency requirement, which gives them the right to vote but not hold a territorial passport or stand for office.

“This is another important development potentially because it looks as if China is now applying its citizenship law to Hong Kong and forcing people to declare who they are,” said Guy Saint-Jacques, a former Canadian ambassador in Beijing. “It is something that will have to be watched.”

He pointed out that the Vienna Convention on consular relations stipulates that if you enter a country using one nation’s travel documents, you cannot claim citizenship of another country. If dual citizens entered the territory using a Hong Kong or Chinese passport, it may affect their claim on Canadian citizenship, Saint-Jacques said.

The ramifications of loss of Canadian citizenship are huge for those on the wrong side of the law, said Margaret McCuaig-Johnston, senior fellow at the Institute for Science, Society and Policy at the University of Ottawa. Ultimately, aside from the possible loss of consular access, dual citizens might be prevented from leaving Hong Kong, she said.

MORE ON THIS TOPIC

The experience of dual citizens in mainland China offers an indication of what may be in store for Hong Kongers. Three Chinese-born Canadian citizens have been sentenced to death in the past two years for drug offences and their names are rarely raised by Canada. “It’s very likely that the Chinese government has instructed the families and embassy not to name them publicly, as Canadian citizenship is not recognized and the prisoners themselves may have renounced it under duress,” said McCuaig-Johnston.

That happened in the case of Sun Qian, a Canadian citizen who was given eight years in prison for being a Falun Gong practitioner. News reports said she renounced her citizenship in the process. Former justice minister Irwin Cotler said she should still be regarded as a Canadian and accused the Chinese of securing a false confession.

Global Affairs spokesperson Babock said Canada’s consular general in Hong Kong is seeking additional information from local authorities about the potential impact of this latest change.

The suspicion is that it is designed to weaken links between dual citizens and their adopted countries.

Britain will start accepting applications from people with British National (Overseas) status this week. BN(O) passport holders include 5.4 million Hong Kongers, who will soon be eligible to move to the U.K. and apply for citizenship after six years.

Such moves have led to calls of retaliation by a growing chorus of Chinese academics and politicians. Calls for curbs on dual citizenship, include the demand that those who obtain foreign nationality should be stripped of right of abode.

Regina Ip, a former security chief for the territory, said earlier this month that Beijing should end its special treatment of Hong Kongers and impose its own nationality laws.

This followed just days after 50 of the territory’s most prominent democracy activists were arrested and accused of trying to overthrow the government, in the biggest crackdown since China imposed its security law last summer.

The sheer size of the diaspora in the territory has put Canada at the centre of the citizenship debate.

Tens of thousands of Hong Kong-born immigrants landed in Vancouver after the 1997 handover from Britain and while many returned home, they retained Canadian citizenship.

Canada should have an evacuation plan, just in case

Since the crackdown started, Canada has accepted a number of asylum-seekers fleeing arrest, prompting the Chinese ambassador in Ottawa, Cong Peiwu, to warn that receiving “violent criminals” could jeopardize the “health and safety” of the 300,000 Canadian passport holders in the Hong Kong.

For now, those people are free to leave. In an interview with the National Post last summer, Cong re-affirmed the right of exit, saying it is up to Canadian passport holders whether they stay or go.

But Avvy Go, director of Toronto’s Chinese and South-east Asian legal clinic, said there has been a pattern of China not recognizing foreign citizens, “particularly when it suits their purpose”.

“Canada should have an evacuation plan, just in case” China introduces exit controls, she said.

 

 

 

Momentum was building in Toronto’s condo market toward the end of 2020 after months of sluggish sales and soaring inventory.

While it’s still early days, preliminary condo sales data shared by Toronto broker John Pasalis shows this momentum, and then some, has carried into 2021.

According to a screenshot of aggregate Toronto MLS data Pasalis shared on Twitter earlier this week, condo sales recorded between January 1st and the 14th were up 90 percent when compared to the same period a year ago. In the first 14 days of the month, 1,177 condo units changed hands, up from 620 in 2020.

In a series of tweets, Pasalis wrote that condo sales are “strong” but pointed out that new condo listings are also very high, up 66 percent from the same period in 2020.

“I haven’t looked at the data closely but I do wonder if some investors are rushing in as others are taking some money off of the table,” he tweeted.

Pasalis, who is the president and founder of the Toronto brokerage Realosophy, also noted that a surge in investor demand in the condo market would be interesting to see considering the current state of the rental market. Recently released data from Urbanation shows rental vacancies in the city are at a 50-year high as of 2020’s fourth quarter.

Still, the surge in condo sales activity seen in the first half of January has clear roots in a sales rebound observed in the Toronto Regional Real Estate Board’s (TRREB) December data.

Condo sales in two of the most condo-dense areas of the city, known in the industry as C01 and C08, were up 86 percent and 143 percent, respectively, over December 2020.

C01 includes Cityplace, Liberty Village and a large swath of the Financial District west of Yonge Street, while C08 covers the Distillery District, the eastern Waterfront Communities, Regent Park and the downtown core east of Yonge Street.

At the city-wide level, condo sales were up 76 percent annually in December, according to the latest TRREB data.

RBC Senior Economist Robert Hogue wrote that it appeared condo buyers were “out in full force looking for bargains” as soaring listings and months of sluggish demand caused Toronto condo prices to fall.

Hogue predicted that the condo market’s affordability advantage over single-family homes would draw more buyers in this year.

At the end of last week, the RBA released a previously confidential report from November that showed the consequences of reducing the cash rate by 100 basis points. The document pointed to a potential 30% increase in property prices over the next three years should borrowers see the low rate as being permanent, and a price increase of 10% should they see it as temporary. While this would help drive the economy through increased wealth and household spending, it could also induce borrowers to bite off more than they can comfortably chew in credit. MPA spoke with Mortgage Choice CEO Susan Mitchell, as well as author of Positively Geared and buyer’s agent Lloyd Edge to examine what a 30% price increase could mean for the property market and the lending industry as it heads towards a credit model of “borrower responsibility.”

Property price versus employment

According to the internal RBA communication, an increase in asset prices is likely on the cards as lower financing costs work to support the supply of credit and contribute to a lower exchange rate. The report said rising asset prices, including those of property, would create an increase in wealth which would invariably lead to an increase in household spending – while an increase in collateral would boost the borrowing capacity of households and businesses.

But according to Edge, this could come at the detriment of first-home buyers.

“I don’t believe that either scenario can point to precisely what increase we will get in house prices but there will be a sustained increase as a result of a permanent rate cut,” he said. “It will continue to push housing prices higher and out of reach for first home buyers, so we will be revisiting the same issues.”

Mitchell agreed that property prices would likely increase as a result of sustained low interest rates, but referenced a recent increase in loan commitments within the first home buyer segment.

“Lower rates are going to mean that property prices will probably increase,” she said. “I guess the question is, what’s the most important thing? Is it allowing some of those property prices to increase but actually stimulating the economy and getting more people employed? I think they’ve (the RBA) decided that employment’s more important.”

On the question of how this would affect housing affordability, Mitchell pointed to record high loan commitments from November, adding that moderation would be key when it came to balancing rising asset prices.

“If it doesn’t get out of control that’s great, and if first home buyers are now able to come into the market when they haven’t really had that opportunity in the past that’s great too,” she said. “It’s really all in moderation that we can let some of the asset prices go up a bit.”

The risk of taking on too much debt

One of the risks attached to rising asset prices in the RBA report was that “borrowers might be induced to take on too much credit if accompanied by looser lending standards and/or optimistic assessments of risk.” When coupled with the treasurer’s proposed relaxation of responsible lending obligations, and an increase in new LVR lending above 85%, Edge believes price increases are likely.

“However, we do run the risk of households getting into more debt and financial trouble due to the looser lending requirements,” he added. “I see banks tightening their own internal systems and checks to avoid having borrowers who cannot afford the loans they want.”

“It’s important to understand that when the treasurer says he wants to pull back on some of the parts of responsible lending, he’s not trying to get rid of oversight of the lending process,” said Mitchell. “APRA still has oversight of the lending process and more than that they’ll also bring the non-banks into that same oversight.

“I still believe that APRA will have a tight rein on the different institutions and I also believe that the banks themselves will look very, very much at their credit and what may happen with some of these asset values, and they will take that into consideration because they want a safe portfolio as well.”

She said that while we won’t know exactly what the reimagined responsible lending obligations will look like until March, one thing is clear.

“It’s getting more and more complicated,” she said. “It’s unprecedented times and I just want our brokers to think very carefully and make sure that they are focusing on all the change happening out there.”

She said it is important for borrowers to reach out for guidance given the complexity of the lending environment – making it all the more crucial that brokers understand each change that happens while understanding how the changes will affect each individual client that comes to them.

Edge said that rising house prices would lead to more work for brokers, adding that “compliance will be more important than ever.”

The GTA’s condominium market is heating up again, with sales surging 90% year-over-year on the MLS through the first two weeks of January.

“We’re seeing a huge rebound in interest and demand. Condo listings are up 66% over last year, but it’s interesting to see such strong demand for condos downtown,” said John Pasalis, president of Realosophy Realty. “For the second half of 2020, the condo market was pretty sluggish and prices in the downtown core dipped about 10%, but a lot of investors saw that as a good opportunity to jump into the market and potentially get some value by taking advantage of a surge in listings.

“[Investors are] optimistic and believe prices will go higher in the near term, and this is largely what’s driving investor behaviour.”

The optimism began manifesting late last year with condo sales in December increasing by 75.9% year-over-year in the City of Toronto, according to the Toronto Regional Real Estate Board’s latest data. The impetus for renewed confidence in the condo market was likely news that COVID-19 vaccines are available for distribution.

“I do think the vaccine was a big issue and perhaps led a lot of investors to jump back in during Q4,” said Pasalis. “A combination of softening prices, the vaccine and recovery caused optimism to kick in and I think that helped swing the market a fair bit, for sure. A bit of optimism led people to jump into the market. We heard news about the vaccine and that a good number of Canadians would be vaccinated by September, and that led investor sentiment.”

Although it doesn’t look like inoculation targets will be realized by the end of Q3, prolonged distribution delays aren’t expected.

Frances Hinojosa, mortgage broker and managing partner at Tribe Financial, confirmed that the downtown Toronto condo submarket in January has picked up from where December left off, with young professionals taking advantage of low interest rates and soft condo prices to become homeowners. Hinojosa also says another cohort of buyers with an eye to the future are active as well.

“Investors understand we’re going to come out of this, and back in October the government announced it’s going to substantially increase the number of newcomers to Canada to 1.2 million in the next three years, and 60% of them will be economic class,” she said. “It might not seem like there are investment opportunities right now, but Toronto’s downtown core has retained the companies that need those workers. They will be renters, so immigration will fill that gap.”

Although consumer confidence has resuscitated the city’s condo market, Pasalis warns that it could be tenuous and that Q1-2021 may determine what happens for the rest of the year.

“Q1 will tell us a lot. If rents start falling even more, then it will basically discourage investors from jumping in,” he said, but noted that the market will remain buoyant “if news continues being positive about vaccines and people are optimistic about immigration picking up.”

Purpose-built rental apartment buildings in the City of Toronto reported a record-high 5.7 percent vacancy rate in the final months of 2020, up significantly from the 1.1 percent rate recorded in the same period the previous year.

Housing market data firm Urbanation released the vacancy rate figure this week as part of its fourth quarter rental market report.

According to the report, the 5.7 percent vacancy rate represents a 50-year high when looking at historical rental market survey data available back to 1971.

As the vacancy rate rose, rent prices for purpose-built units declined 10 percent in the fourth quarter to an average monthly price of $2,337. On a per square foot (psf) basis, rent in the City of Toronto declined 6.2 percent to $3.49 psf.

There was a dearth of new purpose-built rental units under construction for the better part of the 21st century in Toronto, which resulted in investor-owned condos only partly filling the rental supply gap. This trend shifted dramatically in recent years when the pipeline of purpose-built rental projects began significantly expanding. By early 2020, the number of units under construction across the Toronto region hit 13,764, a multi-decade high, according to Urbanation.

But a confluence of factors brought about by the COVID-19 pandemic has meant much more of this new rental supply is sitting unoccupied compared to past years. In its report, Urbanation said 3,563 rental units were completed in 2019, with 70 percent occupied by the end of that year. In 2020, there were 1,699 units completed, with only 44 percent occupied by the year’s end.

“The GTA rental market faced its toughest challenges to date in 2020 due to COVID-19,” said Urbanation President Shaun Hildebrand.

“While rents have a long way to go before returning to their peak and supply will continue to be a headwind in the near-term, some improvement can be expected in 2021 as vaccinations eventually lead to higher immigration and at least a partial return to the office for downtown workers and in-class learning for post-secondary students,” he added.

Home prices will continue rising rapidly across broad swaths of Canada in 2021 as low housing supply forces buyers into fierce bidding wars.

That’s the message RBC Senior Economist Robert Hogue is sharing in the bank’s 2021 housing market outlook, published today.

Titled “Canada’s housing market headed for another record year in 2021,” the report identifies robust pre-pandemic housing demand that was carried forward to 2020’s second half as the primary reason why supply is so diminished across many provinces and major regional markets.

Hogue wrote that active home listings in late 2020 were significantly lower than the 10-year average in Ontario, Quebec, most of Atlantic Canada and BC.

“And that’s despite a surge in downtown condo listings since spring in Canada’s largest cities. With so few options to choose from (outside downtown condos), buyers will continue to compete fiercely,” he wrote.

Stiff buyer competition means prices will continue their swift upward march in these provinces, with Hogue predicting a 9.6 percent rise in Ontario for 2021. Quebec is forecast to record a nine percent jump, while BC is pegged for an 8.6 percent increase in property values.

Rather than fixating on the large urban markets in these provinces, the economist was quick to point out that rising prices isn’t just a “big-market story.”

“The pandemic has heated up prices in smaller markets too. In fact, we could see stronger gains in smaller markets than in core urban areas because downtown condo prices are likely to stay flat through much of 2021,” Hogue wrote.

Voracious demand for detached houses returned to Canada’s housing market last year, and just as in years past, unlucky buyers settled for townhouses.

“The reason the townhouse has become more popular than ever in the new construction world is, whether they’re traditional, stacked or back-to-back, they’re less expensive than detached homes, which average more than $1 million in the GTA,” said Mark Cohen, managing partner of The Condo Store in Toronto. “As a result of prohibitive pricing for detached houses, which hiccupped a couple of years ago but bounced back, and because there’s a general shortage of housing, townhouses have come into greater focus as an alternative.”

Townhouses came back into focus in 2020 because the COVID-19 pandemic trapped people, many of whom lived in condos, inside their homes for months, and when the Bank of Canada dropped interest rates, they saw their opportunity to buy a larger home. Unfortunately, the chance to borrow cheap money attracted homebuyers previously priced out of the detached market, and those unable to buy them alternatively sought townhouses.

The average price of a detached house in the GTA was $1,150,529 last year, which increased by 13.2% from 2019, according to the Toronto Regional Real Estate Board (TRREB). Conversely, townhouses averaged $734,921, rising by 11.4% year-over-year. Condominiums, which are significantly smaller than townhouses, averaged $629,491 last year.

“Townhomes always offered, on a price per square foot basis, much better value than condos, which are designed with the highest amount of efficiency and lack of wasted space,” said Cohen. ”But part of that is driven by the fact that they’re expensive—for example, the costs of concrete and underground parking are expensive, and because you spend $900-1,500 psf on a condo, certain things you might find in a house, like storage, become expensive.

“Townhouses often give you more anti-space and transitional space, and that’s closer to living in a detached home than an apartment. As a result, space is less expensive and you effectively get more for less. From a spatial perspective, townhomes offer more for less, and from a maintenance fee perspective they could be zero or negligible. There are no real expenses associated with amenities.”

Investors have also turned their attention to townhomes because they noticed the pandemic sparked desire in people for more space, and just as there are only so many detached houses for sale, there are even fewer townhouses—there were 46,359 detached sales in the GTA last year, but only 16,444 involving townhouses.

“With more people working from home, two-storey living makes sense for a variety of reasons,” said Cohen. “Investors are keen on trends and realize townhouses make sense because they allow people to functionally live and work at home at the same time.”

A report from the Canadian Centre for Economic Analysis (CANCEA) a few year ago shone a light on the dearth of so-called missing middle housing—defined as multiplexes, semi-detached, rowhomes and townhouses—in the GTA, and according to Michael DiPasquale, a CPA and COO of Dunpar Homes, the pandemic inadvertently renewed interest in these housing types.

In fact, added DiPasquale, many developers recently nixed planned high-rise developments in favour of mid-rise boutique or stacked townhouse projects, indicating that the shortage of crucial forms of housing CANCEA warned about might finally be addressed.

“Missing middle housing is more affordable for the average person and you don’t have to deal with elevators or be downtown, which is still accessible with transit or by driving a short distance,” he said. “I would say that the missing middle question has been answered because people see the need for it and the need for more space.”

Dunpar Homes has developed many infill townhouse projects just outside Toronto’s core over the years, changing the complexion of neighbourhoods in the process, and 2020 was no different. Parts of the GTA, like south Etobicoke and Streetsville in Mississauga, are prime locations for missing middle housing because Toronto’s downtown core is nearby.

“Townhouses, stacked townhouses or semis—products for people who don’t want to be in condos and can’t afford detached—fill the gap, and it’s been an issue for years,” said DiPasquale. “COVID has ramped up focus on solving the missing middle because it’s nice to have two or three bedrooms and 1,500-2,000 sq ft as opposed to 500-600 sq ft in a condo.”

The Toronto Regional Real Estate Board released its 2020 housing figures this week. And I suspect that the numbers are probably directionally similar for many city regions around the world.

2020 saw more home sales than 2019 with 95,151 homes changing hands. This represents an 8.4% increase compared to last year. December was also a record month with 7,180 sales — a 65% year-over-year increase!

The average selling price in the Greater Toronto Area also reached a new record of $929,699. This represents a 13.5% increase compared to last year. Once again, December was a record setting month with an average selling price of $932,222.

When you look at sales and average prices by home type, the biggest drivers were low-rise homes outside of the city. No surprises here.

 

 

 

But consider the price spread that now exists between condos and detached homes. In the City of Toronto (“416”), we’re talking about an average price delta of nearly $850k. That would be an expensive home in many other markets.

Of course, condos tend to be smaller than detached homes. And so different prices per pound. But total price matters a great deal and historically a widening spread has moved many buyers over to the condo market.

Condo sales soared across the Toronto region in December, and as one economist wrote, it looked like buyers were out “in full force looking for bargains.”

While roaring detached home sales and skyrocketing prices have stolen the lion’s share of the headlines in recent months, it now appears that condos are mounting a comeback, at least when it comes to sales activity.

After the Toronto Regional Real Estate Board (TRREB) released its December sales and pricing data earlier this week, RBC Senior Economist Robert Hogue wrote that condo sales caught his attention.

He acknowledged that the challenging rental market is still pushing investors to offload their units, causing condo supply to surge and prices to continue to post only modest gains in suburban communities and fall by nearly five percent in Toronto-proper.

That said, Hogue observed that sales spiked 75 percent across the Toronto region, with similar strength seen in both city and suburban markets as “softer condo prices are now drawing more buyers in.”

In 2021, the economist is predicting that condos’ affordability advantage over detached homes will allow demand to pick up even more steam.

Of the four distinct property types tracked by TRREB, only townhouse sales in the region’s 905 area posted higher annual percentage gains than condos.

In terms of overall sales volume, detached homes still significantly outsold condos across the region, but the gap between the two property types narrowed. In November, detached homes outsold condos by 2,190 units at the regional level. By December, the gap had narrowed to 845 units separating detached homes and condos.

It’s also worth noting that Toronto region condos were the only property type to post a monthly sales increase in December. Detached, semi-detached and townhouses all saw activity decline from November to December.

After years of a booming Greater Toronto Area (GTA) housing market, 2020 marked the first real obstacle for the real estate business since the late 2000s recession. COVID-19 brought on unprecedented challenges that saw staggering declines in market activity starting in the second quarter of the year. Despite all of the hurdles encountered last year, a new report from the Toronto Regional Real Estate Board (TRREB) reveals that 2020 ended up being the third-best year on record for the GTA market, with a total of over 95,000 home sales and a new record average selling price of $930K.

“The Greater Toronto Area housing market followed an unfamiliar path in 2020. Following the steep COVID-induced drop-off in demand during the spring, home sales roared back to record levels throughout the summer and fall. A strong economic rebound in many sectors of the economy, ultra-low borrowing costs, and the enhanced use of technology for virtual open houses and showings, fuelled and sustained the housing market recovery,” reads a statement issued by Lisa Patel, TRREB President.

Even with the pandemic’s hit to the economy, job losses, and other associated challenges, the 95,151 sales recorded last year actually marked an 8.4% increase over 2019’s sales figures. After the initial wave of public health restrictions was rolled back, the housing market saw an unprecedented bounce-back that included multiple record-breaking months. Most recently, the month of December broke records with 7,180 sales marking a year-over-year increase of 64.5% While sales growth was pronounced overall, it was strongest in the 905 regions, most notably in the single-family home submarket.

“While the housing market as a whole recovered strongly in 2020, there was a dichotomy between the single-family market segments and the condominium apartment segment. The supply of single-family homes remained constrained resulting in strong competition between buyers and double-digit price increases. In contrast, growth in condo listings far-outstripped growth in sales. Increased choice for condo buyers ultimately led to more bargaining power and a year-over-year dip in average condo selling prices during the last few months of the year,” stated Jason Mercer, TRREB Chief Market Analyst.

2020 average home prices climbed to an all-time high of $929,699, a 13.5% jump over 2019. In December, the average was up to $932,222, marking an 11.2% year-over-year climb. As with sales, the average home price increase was most pronounced in the 905 single-family home submarket.

“The next 12 months will be critical as we chart our path through recovery. In particular, the impact of resumption in immigration and the re-opening of the economy will be key. TRREB will once again be releasing its January results, Market Year in Review and 2021 Outlook report on February 8th. This will include a forecast for home sales and selling prices, the latest Ipsos consumer polling on the GTA housing market and new research related to innovative ways to bring on more housing supply,” stated John DiMichele, TRREB CEO.

With the COVID-19 pandemic forcing us to spend more time indoors, the desire for bigger homes among luxury buyers across the Greater Toronto Area has pushed sales in some expensive price categories to new highs.

GTA luxury home sales priced between $3 million and $4 million broke a record in 2020, according to new data published this week by RE/MAX Ontario-Atlantic Canada.

One thousand and sixty-two freehold and condo properties over the $3 million mark changed hands last year, about one percent higher than the previous all-time high achieved in 2017, when 1,047 homes in the same pricing category sold. Sales over $3 million in 2020 were also up over 55 percent from 2019, when 682 transactions were recorded.

Sales at even higher price points — the $4 million and $5 million categories — also rose from their 2019 totals, but did not exceed the highs achieved in 2017.

“A combination of both economic and psychological drivers contributed to a robust upswing in demand, influencing one of the greatest pivots in the GTA’s housing market history,” said Christopher Alexander, Chief Strategy Officer and Executive Vice President of RE/MAX of Ontario-Atlantic Canada, in the report.

While economic stimulus, like rock bottom mortgage rates, played a role in the market’s surge in homebuying activity, RE/MAX Ontario-Atlantic Canada explains that COVID-19 lockdowns were the true catalyst for the uptick.

The desire for home offices and more personal space were attributed as the driving forces behind luxury buyers seeking larger homes in 2020, often in less densely populated areas that sometimes fell outside of suburbs immediately surrounding the city. For instance, freehold sales over $3 million in Halton region increased by 188.8 percent annually, jumping from 45 to 130 sales.

“This same pattern played out in major urban centres in the US such as New York City and San Francisco where the pandemic has tipped the scales in favour of a more suburban lifestyle,” explained Alexander.

“And while demand is still strong in the 416, where luxury freehold sales represent 59 percent of total sales, performance in suburban areas, especially those north and west of the city, is particularly noteworthy,” he added.

What is the purpose of the Condo Guide?

Ontario’s Residential Condominium Buyers’ Guide (Condo Guide) was developed by the Condominium Authority of Ontario (CAO) in collaboration with the Ministry of Government and Consumer Services (MGCS) and approved by the Minister as a helpful resource for the buyers of residential pre-construction/new condo units.

You can read and refer to the Condo Guide from the moment you begin to consider buying a condo unit and throughout your condo ownership life cycle.

As of January 1, 2021, section 72 (1) of the Condominium Act, 1998 (the Condo Act) will require that declarants provide the Condo Guide to buyers of residential pre-construction/new condo units.

Under section 73 (2) of the Condo Act, buyers have a 10-day cooling off period in which they may rescind their agreement of purchase and sale. This 10-day period begins on the later of the date on which the buyer receives the agreement of purchase and sale, disclosure documents, and the Condo Guide.

What does the Condo Guide contain?

The Condo Guide equips prospective buyers of residential pre-construction/new or resale condo units with information on condo ownership and the condo purchase process.

It also contains various topics including moving into a residential pre-construction/new condo unit, condo living, and how condo owners can resolve issues.

Although the Condo Guide is primarily written for condo buyers, if you have recently purchased a unit, or even if you are a long-time condo owner, the Condo Guide may also be of interest to you as it covers many topics relevant to condo ownership.

The Table of Contents was designed by MGCS after consultations with the condo sector and contains necessary and up-to-date topics that are important for all condo buyers to consider.

Can I provide feedback on the Condo Guide?
We are encouraging readers of the Condo Guide to provide feedback regarding areas for enhancement. Taking part in this feedback survey allows the CAO and MGCS to continue to develop a Condo Guide that best meets the needs of prospective condo buyers, condo owners, and the condo sector.

If you think activity in Toronto’s condo market has decelerated, think again.

“The information that’s not being reported, but that I see because I have to approve these and sign off on each one of them, is there are a lot of assignment sales right now,” said Sam Crignano, president of Cityzen Development Group. “This is information that isn’t reported on the MLS. The market is not as quiet as people think. It’s active, and I would say in a good way.”

Indeed, according to Toronto Regional Real Estate Board data for November, condo sales in the City of Toronto rose by 0.8% year-over-year. And while investors flip assignments all the time, being a landlord in today’s condo market, which has been infused with a glut of supply courtesy of a heavily regulated, and shrunken, short-term rental pool, has lost its lustre. That doesn’t mean the condo units aren’t still worth a lot of money, though.

“What we’ve seen recently, because the rental market is somewhat soft, is people are choosing to sell their assignments rather than hold onto them long-term,” said Crignano. “In buildings we’ve finished in the last six months where investors are selling assignments, they’re selling at a decent profit that’s still a discount to today’s market value. If they bought at $800 per sq ft a few years back, the market appreciated. New condos today are at $1,200-1,300 per sq ft, but a lot of investors are selling at a price that’s closer to $1,000 a sq ft. End users are taking advantage of lower prices and historically low-interest rates, which has created relatively cheap money.

“As much as people think the condo market is dead, it really isn’t.”

In fact, as Howard Cohen explains, end users are often unwilling to wait three to five years to occupy their new home, but investors rarely flinch when they put a 20% deposit down on a preconstruction unit. With Toronto condo prices declining by 3% year-over-year in November, end users are likely circling.

“If a condo costs $600,000, you need $120,000 cash deposit, and not a lot of people have that, but investors do and they’ll buy the unit,” said Cohen, president of Context Development. “Three years later when they decide to sell it, somebody can buy it using a 5% down payment with CMHC’s help. So the $600,000 unit might now be worth $800,000, but the buyer only needs $40,000 to buy it. Investors get a bad rap but they really do fuel the housing market for a lot of people.”

Assignment flips can net hefty returns, particularly for units on higher floors, but the developer must first sign off on them—which they aren’t likely to do if their building still has units for sale. Crignano says that isn’t usually a problem in Toronto.

“If I have a building completely sold out, they’re not competing with units I have for sale, and on that basis I’d grant permission for them to sell the assignment,” he said. “However, if I have plenty of units left for sale, I’d obviously want to sell my units first before I allow assignments, but the market has been so strong the last two years that most developers are sold out and grant assignment sales to purchasers.”

A partnership is about values, what you want to achieve and why. Simply put, Mizrahi Developments came about with a vision of several goals to change expectations in the industry.
Firstly, it was a desire to enhance the changing streetscapes of Toronto with carefully articulated, mid-to-high-rise buildings that give those who work and live in them as much pleasures as those who pass by their exteriors.

But just as important as what we build is the notion of how we build.

And by that we mean our values as professionals. It may be buildings we’re constructing, for residential, commerce and retail, but we’re aware that they have impact on people’s lives. They become a permanent part of physical identity with an influence on how people feel, live and experiences the city. It is with that understanding of our business as one that’s about far more than merely bricks and mortar that we have put an emphasis on relationships with customers, architects, designers, local residents, city counselors and suppliers as the foundation of our work. We believe that development of the physical landscape of a city can be a good thing, not something accepted out of resignation to change, but welcomed and celebrated for the delight and improvements it brings.

With our customers, our priority is to give peace of mind with the industry’s top certifications. But our commitment to service doesn’t stop when the building is completed. The uniformed, trained concierge, who works 24/7 in our residential buildings, as well as other staff, is under our employ to deliver the best and meet our customers’ needs. We leave nothing to changes. Similarly our relationships with suppliers result in loyalty and a commitment to build on time and one budget.

 

Canadian landlords have endured a difficult 2020, but there is one metropolis that, according to a Rentals.ca report, is brimming with investment opportunity.

“Montreal is expected to be the top major market in Canada next year with rent growth of 6%, rising from $1,665 per month forecast for December 2020 to $1,760 per month,” the report said. “There is clearly no urban exodus in Montreal despite the strong rent growth in 2019, and the above-inflation increase in 2020, average rents are still relatively affordable in comparison to Vancouver and Toronto.”

In the Montreal region, which Rentals.ca called “a bright spot for landlords in Canada,” rents rose by 9% year-over-year to $1,454 for one-bedrooms in November, although rents were down 1.4% from October. Two-bedroom units in the City of Montreal increased by 5.1% year-over-year to reach $1,889 last month, and also rose by 0.4% from October.

However, if 2020 has been any indication, landlords in the Greater Toronto Area aren’t likely to see rents increase in 2021, at least to start the year.

According to the report, the city’s rents declined for 12 straight months in November, as the infusion of supply into Toronto’s long-term rental pool and a scarcity of renters have softened the market.

A one-bedroom unit in the GTA averaged $1,877 last month, plunging by 19% year-over-year and 2.3% month-over-month, but it’s still the highest in Canada. A two-bedroom unit in the region averaged $2,468, falling by 17.2% from November 2019 and by 2.6% from October.

“The average property for rent in Toronto is now $520 cheaper per month in November of this year compared to November of last year,” said the report. “The average rent dropped by a whopping 20% annually to $2,081 per month, lower than Mississauga. On a per-square-foot basis, the average rent declined from $3.60 PSF to $3.12 PSF, a decline of 13%.”

Short-term rental regulations and a dearth of international students, most of whom fled Canada when the COVID-19 pandemic struck and catalyzed lockdowns, has resulted in a proliferation of condo units in the City of Toronto that has rendered condo rentals the weakest segment of the regional real estate market.

“We’ve monitored the market and, pre-COVID, we had 4,500 rental condos units available in Toronto, and in August the number grew to above 10,000 units,” said Alex Balikoev, senior vice president of sales at Sotheby’s International Realty Canada. “The reasons for that were job losses and a drop in immigration.”

The average rent in Canada, according to Rentals.ca listings, was $1,743 in November, which declined by 9.1% year-over-year and by 2.2% month-over-month.

The average rental price of a one-bedroom unit in Vancouver was $1,865 in November, falling by 5.2% from the same month in 2019, and by 1.9% from a month earlier, while a two-bedroom unit averaged $2,636 last month, which is a 13.8% year-over-year decline and a 2.8% month-over-month drop.

“In November of last year, the average rent in Vancouver for all property types on Rentals.ca increased by 7% annually to $2,507 per month,” said the report. “A year later, the average rent is down 12% year-over-year to $2,216 per month.”