Toronto condo market in trouble as listings rise and rents fall

Data compiled by the Toronto Regional Real Estate Board in collaboration with Urbanation Inc. have found a 215% increase in listings for condominiums in Ontario's capital between September 2019 and September 2020, Bloomberg News reports.

The growth in condo listings has far outpaced other housing unit listings, which as a whole have grown by 5.3% in the same period.

The increase in the supply of condos being sold on the market has reduced condo rental prices on average by 11% in the third quarter compared to the same period last year, the largest annual decline ever recorded in the city.

Industry experts have noted that COVID-19 has proven to be a major blow to the condo market, with downtown Toronto being the region hardest hit. The decline in rental prices in the downtown core have outpaced the rest of the city, declining by 14.5% since last September.

Downtown has experienced a decline in new immigrants and individuals fleeing to the suburbs with lower population density. Many have found themselves working from home during the pandemic and are no longer incentivized by shorter commutes to live downtown.

Likewise, while condo sales and rentals have dropped, new home sales have skyrocketed in the Greater Toronto Area. Such sales have spiked by 42.3% since the same time last year, the highest annual rise in GTA's history.

The average selling price has risen alongside this spike, reaching $960,772 in September. It was the fourth month in a row in which Toronto's average housing price broke a new record.

Many condo owners are scrambling to get their units off the market, undercutting their competitors by as much as $20,000 in an attempt to attract new customers.

Toronto is often identified by industry analysts as one of the most expensive housing markets in the world. In their 2020 housing affordability survey, the housing prices analytics firm Demographia identified Toronto as being tied with Auckland, New Zealand as the sixth most expensive housing market in the world. Toronto housing prices nevertheless continue to trail Vancouver's, which has long held the record for housing unaffordability in Canada.