Toronto breaks more real estate records, but condos under pressure

The Greater Toronto Area’s (GTA) real estate market had another record-breaking month in October, even as COVID-19 cases forced new shutdowns.

The Toronto Regional Real Estate Board says 10,563 homes were sold during the month, which is 25.1 per cent more than October 2019.

It was the fourth straight month of year over year sales gains against a backdrop of an economy and job market still struggling to recover.

The so-called urban exodus continued with 3,514 sales in the City of Toronto compared to 7,049 for the rest of the GTA.

There’s a clear difference when it comes to housing types. Sales are well ahead of listings for detached homes. But condo apartment listings have doubled since last year, while sales are up only 2.2 per cent, leading to a decline in rents.

“In the condo segment, Right at Home’s data also showed a slowdown in sales and rentals as well as a spike in condo listings in the past month as we continue to see Canadians who live in the downtown core seek more space, particularly in suburban and periphery markets,” John Lusink, president of Right at Home Realty, told Yahoo Finance Canada.

Condo apartments in the City of Toronto were the only type of home that saw sales fall (-8.5 per cent). The average selling price was also the weakest (0.8 per cent), pointing to a shift out of lower priced micro-condos.

“Competition between buyers of single-family homes, and particularly detached houses, remained strong last month and continued to support double-digit annual rates of price growth in many GTA neighbourhoods. In contrast, condo buyers have benefitted from much more choice compared to last year,” said Lisa Patel, TRREB’s president.

“Pre-COVID polling had already pointed to an increase in investor selling in 2020. The pandemic only added to this trend with a stall in economic growth and a halt to tourism impacting cash flows for many investors.”

Stronger sales for higher priced homes pushed the average selling price across all home types up 13.7 per cent to $968,318.

The MLS HPI Composite Benchmark, which aims to even out those distortions, was up by 10.8 per cent to $897,700 from the year before. The biggest increase was in Durham region (18.2 per cent).

City of Toronto condo apartments lagged using this metric too — up 4.55 per cent but gains have been trending lower since the start of the year.

“The economic recovery in some sectors coupled with low borrowing costs has kept home purchases top-of-mind for many GTA residents. With this being said, we have not accounted for all of the pent-up demand that resulted from the spring downturn,” said Jason Mercer, TRREB’s chief market analyst, in a release.

“Expect record or near-record home sales for the remainder of 2020,”

TREBB says Ottawa’s plan to boost immigration will also help support the area’s homes for sale and rent.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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