TORONTO, ON--(Marketwired - March 29, 2017) - "Toronto condos are still an affordable option for buyers looking to get into the Toronto housing market," says Franco Dinatale of Right at Home Realty Brokerage Inc.'s Toronto Condo Team (www.TorontoCondoTeam.ca). "Low-rise home prices have skyrocketed over the last couple of years, making the purchase of a detached home in Toronto unattainable for many buyers. In 2016, we saw a tremendous increase in condo sales which, I believe, is a direct result of unaffordable single home prices. It is significant that there has not only been an increase in demand for entry-level condos, but also for two-bedroom units. Buyers of larger condominium units typically are already in the housing market. Generally, they are seniors downsizing from a single-family home, or singles and couples moving up from a smaller condo unit. What is now different is that many of these buyers are families, or young couples looking to start a family, who have been priced out of the detached market. They need more space but can't afford to buy a detached home in Toronto. As an alternative, they are turning to two or three-bedroom condo units to give their family the space they need at a price they can afford," explains Dinatale.
Statistics released by the Toronto Real Estate Board show that new condominium apartment sales hit an all-time high in 2016. A total of 27,217 new condo apartments were sold across the GTA in 2016, a 34% increase over 2015. By comparison, the number of resale condo units that changed hands in the city rose 20.2%, totaling 29,784 in 2016. The medium price of a Toronto condo also climbed in 2016 from $331,000 in 2015 to $377,500 in 2016, an increase of 14%. These records were set despite a record low inventory of available units. A 10-month supply of product is thought to be a balanced market for new condominiums. Currently, there is only about a 4.4 month supply. It is predicted that unsold inventory levels for Toronto condos will remain down due to rising demand and fewer pre-construction projects on the horizon.
"Clearly the Toronto condo market has changed. The average time a condo apartment remains on the market before it is sold has significantly decreased. Buyers need to act fast. Now more than ever they need to be preapproved for financing so that they are ready to put in an offer. Lack of inventory and high demand will continue to put upward pressure on prices. The provincial government's policy of cutting back on approving new serviced land for developers means that it may be some time before supply meets demand. Escalating detached and low-rise home prices will drive more and more non-traditional condo buyers towards condominium units, putting further demand on the Toronto condo market. What will not change, however, is that for many home buyers, Toronto condominiums remain a good investment, especially for the first-time buyer looking to get his foot in the door of the crazy Toronto real estate market and start building equity," advises Dinatale.
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