Toronto condo prices keep going up and supply keeps going down

Posted by Nicholas Searle ot 05:40 PM

Toronto condo prices have continued to climb since 2012.

Toronto condo prices keep going up, even though overall sales volume might go up or down, depending on the time of year or other factors.

During the year the market follows a standard cyclical pathway. We always see the market moving up in Spring, down a bit in summer, up again in the fall and then down over the winter months. This is partly driven by the times that people need to or want to move. Many moves are made because Buyers are starting a new job, and that often happens around September. Also Buyers with families and kids that go to school, need to be settled by September so the market is driven by those time factors. Although the condo market is generally a year round market, unlike the detached home market, it is also seasonal by virtue of the weather. Fewer people for example like to move in the middle of January when the Canadian winter is at its peak!

There are fewer and fewer condos for sale each year. 

Unlike many perceptions from the media or elsewhere, Toronto does not have too many condos.

From all the data we have seen since 2012, we continue to have more Buyers than the available supply. That means the demand is higher than the available number of units. The Toronto Real Estate Board has confirmed this - Over time since 2012 they have seen less and less inventory or stock on the market.

On average around 15,000 - 20,000 new condos might be built in Toronto each year. And then there is a portion of resale condos that go to market every year.

However at the same time, about 100,000 new people move to Toronto each year, and so the supply cannot keep up.

These new residents are a mixture of immigrants and Ontarians or out-of-province Canadians moving to the Toronto from other provinces in Canada, or other smaller cities in Ontario.

The majority of of these individuals bring skills and financial assets and the goal of home ownership. 

The trend of low supply compared to demand is not going away soon.

People will continue to come to Toronto for new job opportunities and new educational training, because it is an economic hub for Ontario and Canada.  Unless housing and condo construction greatly expands, the influx of new residents into Toronto will continue to outpace the supply of property every year. 



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