The Toronto condo market experienced a notable decline in the second quarter of 2024, with sales dropping nearly 20% compared to the same period last year. According to recent data from the Toronto Regional Real Estate Board (TRREB), only 5,474 condos changed hands in April, May, and June, down from 6,824 in Q2 2023.
This continued downturn comes amid the still persistently high interest rates, significantly impacting the condo market. TRREB President Jennifer Pearce noted that the condo segment is particularly sensitive to interest rates, as it often serves as an entry point for first-time homebuyers. With monthly payments remaining high and average rents decreasing over the past year, many potential buyers are hesitating to enter the market.
Despite the sales decline, condo prices have remained relatively stable. The average selling price in Q2 was $729,005, representing only a 1.2% decrease from the previous year. This suggests that sellers are holding firm on their listing prices, possibly anticipating improved market conditions as borrowing costs are expected to decrease in the coming months.
The Bank of Canada has recently begun cutting interest rates after a series of increases between March 2022 and July 2023. Two consecutive rate cuts have been implemented, with further reductions expected as inflation continues to slow.
Read: Bank of Canada Cuts Interest Rates By 25 Basis Points Again
The number of condo listings surged by 36.5% in Q2, resulting in elevated inventory levels, with levels approaching seven months of inventory. This increase in supply, however, has not led to notable price reductions, particularly in Toronto proper.
The current market conditions reflect a broader trend in Canadian real estate, with some experts suggesting that the industry is facing its most significant challenge since the 1991 recession. The situation is particularly pronounced in the Greater Toronto condo market, where investors traditionally represent a large portion of buyers.
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