This HuffPost Canada page is maintained as part of an online archive.

Toronto Condo Prices Soar 35% In A Year: Urbanation

But the party is expected to end this year.
Condominiums stand along the shore of Lake Ontario in this aerial photograph taken above Toronto, Mon. Oct. 2, 2017. Toronto condo prices soared 35 per cent in the past year, according to data from Urbanation.
Bloomberg via Getty Images
Condominiums stand along the shore of Lake Ontario in this aerial photograph taken above Toronto, Mon. Oct. 2, 2017. Toronto condo prices soared 35 per cent in the past year, according to data from Urbanation.

Toronto's single-family home market has been under pressure recently, with prices lower today than they were a year ago, but the same can't be said for the city's red-hot condo market.

Prices for available condos soared 35 per cent over the past year, market research firm Urbanation reported on Thursday. The average price per square foot rose to $876. In central Toronto, prices soared past $1,000 per square foot for the first time.

Market observers say the rapid run-up in single-family home prices in recent years has convinced some buyers to give up on detached homes and buy into the condo market instead. That may help to explain the drop in sales and prices for Toronto's detached homes over the past year, even as the condo market stayed heated.

Watch: Not enough young Canadians to support high house prices, CMHC says

But in a sign that condos could cool somewhat this year, Urbanation said it is seeing speculators exiting the market. The share of condos purchased by speculators (those who sell within 12 months) dropped from 4 per cent in the first quarter of 2017, to 2.9 per cent in the fourth quarter.

"Less speculative demand in the second half of the year contributed to lower overall resale condo sales volumes in 2017, which declined 6 per cent to a total of 23,907 units," Urbanation said in a report.

What's Going On In Housing?

Our weekly newsletter delivers the news and analysis you need on Canada's housing market. Sign up below and don't miss an issue.

Speculators may be leaving due to the recent uncertainty in the market: A slowdown in single-family home sales, coupled with rising interest rates and tougher new mortgage rules that observers say will keep the market soft at least for the first half of this year.

According to preliminary data, Toronto's housing market slowed sharply in January, as new mortgage rules took hold. Prospective buyers are "waiting on the sidelines" to see how the new market conditions shake out, Toronto realtor John Pasalis told Bloomberg.

Urbanation predicts the new condo market will slow this year, with some 26,000 sales, down from the record high of more than 35,000 in 2017.

Urbanation vice-president Shaun Hildebrand describes this as a "more sustainable" pace of sales.

Also on HuffPost:

Close
This HuffPost Canada page is maintained as part of an online archive. If you have questions or concerns, please check our FAQ or contact support@huffpost.com.