Market Overview – August 2024
The GTA real estate market has seen a slight cooling, with overall home sales down by 5.3% year-over-year in August 2024. New listings, however, increased by 1.5%, providing more options for buyers. The average home price decreased marginally by 0.8% compared to August 2023, while the MLS® Home Price Index benchmark fell by 4.6%, indicating some softening across the broader market.
The Toronto condo market, in particular, experienced a more pronounced cooling, with sales down by nearly 15% year-over-year in August 2024. This slowdown in demand contributed to a 6% drop in the average condo price, bringing it to approximately $682,000. While this provides investors with a more affordable entry point, the recent Bank of Canada rate cut is expected to improve affordability even further, particularly for those with variable-rate mortgages. As interest rates trend lower, the condo market is poised for a potential rebound, making it an ideal time for buyers to act before prices begin to rise again.
Toronto Condo Market Forecast: Why Now is the Perfect Time to Invest
As we approach the end of 2024, the Toronto condominium market presents a unique opportunity for astute investors. While some may view the current market conditions as challenging, those who understand the dynamics of real estate know that these are ideal conditions to capitalize on opportunities that may not be available once the market rebounds.
6 Key Advantages of Buying Now:
1) Higher Inventory Levels Mean More Choices and Competitive Pricing
With new listings in the GTA up slightly year-over-year, buyers now have more options and greater negotiating power. This is the perfect time to take advantage of current market conditions before demand rebounds in 2025, pushing prices higher.
2) Anticipated Interest Rate Cuts Could Boost Future Prices
Following the Bank of Canada’s recent rate cut, economists expect mortgage rates to continue trending lower over the next year. This will improve affordability, but as demand picks up, especially in 2025, buyers who act now could benefit from both lower prices and lower monthly payments before the market heats up again.
3) Opportunity to Negotiate with Over-leveraged Investors
The current economic climate has put pressure on many condo investors, particularly those who purchased pre-construction units. With many investors facing high mortgage costs, there is ample opportunity to negotiate favourable terms with sellers eager to offload their properties.
4) Toronto’s Strong and Growing Rental Market
Toronto’s rental market remains robust due to record population growth and continued demand for rental housing. As more people opt for renting in response to affordability challenges, the demand for rental units is expected to stay high, making it an excellent time for investors to secure steady rental income and long-term value appreciation.
5) Exemption from Provincial Rent Increase Guidelines
New buildings first occupied after November 15, 2018, are not subject to Ontario’s rent increase guidelines. This exemption allows landlords to raise rents in response to market conditions, maximizing their return on investment. With rent prices forecasted to rise further due to ongoing demand, this flexibility is a significant advantage for condo investors.
6) The Housing Crisis: A Supply and Demand Opportunity
Toronto’s housing market faces deep structural issues, including high construction costs and lengthy approval processes, which are limiting the supply of new homes. As sales slow and housing starts lag behind, future supply will be further constrained, creating a stronger demand for existing condos. Investing now allows buyers to benefit from this ongoing housing shortage, where limited supply and high demand will drive future price appreciation.
Why Work with Adrian Mainella?
With years of experience as a successful real estate investor and broker, I’ve navigated the ups and downs of the Toronto market and know how to identify the right opportunities. If you’re curious about whether now is the right time to invest or simply have questions about the current condo market, I’m here to help. My goal is to ensure you make informed decisions that align with your financial goals, and I’m committed to putting your best interests first. Let’s discuss how we can make this market work for you.
