Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported 5,595 condominium apartment sales and 6,073 condominium apartment rentals through TREB’s MLS® System in the fourth quarter of 2015.
This represented a substantial 20.7 per cent increase compared to the 5,032 rentals reported in Q4 2014, while condominium sales were up by 12.6 per cent compared to the same period in 2014.
“While the ownership market is often top-of-mind when we think about condominium apartments in the GTA, it is important to remember that investor-held condos have become an increasingly important source of rental supply. Renters looking for mid- to high-end units have tended to be pointed at condo rentals. Strong demand resulted in tighter market conditions in Q4,” said Mr. McLean.
Year-over-year growth in rental transactions outstripped growth in the number of units listed during the quarter. This suggests that competition between renters increased, which explains above-inflation rent increases for one- and two-bedroom condo apartments.
“Tighter rental market conditions resulted in strong increases in average rents compared to last year. Looking forward into 2016, expect rent growth to remain strong if we continue to see growth in the number of transactions outpace growth in the number of units listed for rent,” said Jason Mercer, TREB’s Director of Market Analysis.
The number of new condominium apartment listings entered into TREB’s MLS® System was also up, but by a substantially lower annual rate compared to sales, at 3.3 per cent. The result was tighter market conditions compared to a year earlier.
“The condominium apartment segment is integral to the overall housing market in the Greater Toronto Area. Over the past decade, the trend has been to increasingly build up due to provincial land use policies. As new projects have completed, a number of investor-held units have been listed for sale on TREB’s MLS® System. These units have been absorbed quite rapidly, with enough demand relative to supply to prompt continued price growth,” said Mr. McLean.
The average selling price for condominium apartments in the fourth quarter was up by 4.1 per cent year over year to $382,070. Throughout the fourth quarter, the MLS® Home Price Index (HPI) Apartment Benchmark Price was up by between four and six per cent on an annual basis.
“First-time buyers account for approximately half of all buyers in the GTA and even more so in the City of Toronto. Condominium apartments represent an important entry point into home ownership for a lot of households. This is a key reason why we experienced continued growth in sales for this home type over the past year,” said Mr. Mercer.