Canada's Condominium Magazine
As the housing market cools across Toronto and the rest of the country, condominiums continue to become increasingly popular, especially among foreign buyers and baby boomers who are looking to downsize.
Sales of condos priced above $1 million surged drastically across the country, with Toronto taking the lead with a 59 per cent sales increase.
Brad Henderson, Chief Executive Officer at Sotheby’s International Realty Canada, stated that a stalemate had occurred between buyers and sellers, especially in regards to single-family detached homes. Meanwhile, new condominiums were developed, attracting buyers who were looking to downsize, as well as foreign buyers interested in properties as an investment. According to Henderson, that trend is expected to continue through 2018.
New record: $20 million condo in Toronto
One luxury penthouse in Toronto serves as a prime example of the city’s heating condo market. A 650-square-metre penthouse with views of downtown Toronto and Lake Ontario sold for $20 million, shattering records as the most expensive condo sold in the country in 2017.
According to Royal LePage President and CEO Philip Soper, the primary influence on the condo market is local buyers rather than foreign investors. “There’ve been moves in Canada, Australia, and China to tax foreign investment in real estate, and moves, particularly in China, to restrict the exiting of capital,” he said in a recent interview. “Even taking wealthy Chinese buyers out of play, our luxury markets are still very strong.”
Toronto transforming into a “condo nation”
In a separate interview, Soper discussed the impact “peak millennials” have on the Toronto real estate market. As these millennials reach typical home-buying age, they begin to look for their ideal home, and many are looking to downsize. Some are choosing to downsize in an effort to live a more minimalist lifestyle, while others are looking for their own private abodes after spending a great deal of time sharing with roommates. Others are searching for condos in large cities, within walking distance of nearly everything. [See our market report on the impact of Peak Millenials here>>]
According to Soper, millennials are flocking toward condominiums as their first homes due to their sizes and locations. Despite rising prices, he says that they will still be able to purchase a home.
Toronto realtor Desmond Brown agrees that “the condo in Toronto has become the starter home. Lots of people still want tin the market, and this is their entry point.”
Royal LePage recently released its House Price Survey, which stated:
“Without hesitation, we can say Toronto is now a condo nation, like other advanced cities around the world.”
Then, there’s the downsizing boomer
Despite the growing interest in condominiums amongst buyers, not all of them will be looking for exactly the same units. Downsizing baby boomers prefer smaller units. Others, however, may be looking for something a bit larger. Retired baby boomers, for example, are looking for larger and more expensive condos with spectacular views and easy access to transit.
Regardless of the reasons for the growing trend, experts do not expect a change to occur anytime soon, even with new regulations that limit buyers’ borrowing power. “I think we’ve got more demand than these new regulations can slow down,” said Soper.
However, others are not so certain. Enzo Ceniti, a director with real estate software firm The Red Pin, foresees a shift that stems from the new regulations. The stress test will likely keep potential buyers out of the market, “at least for the first few months,” said Ceniti.
Meanwhile, the mortgage rules, foreign buyer tax, and surplus of inventory are helping buyers to find properties without the need for bidding wars, and listings are remaining on the market longer. Ceniti described the market as not significantly improved, though it does make it “a little easier to be a buyer.”