2017 has been a turbulent year for the Greater Toronto Area housing market. With the sales on a decline and the prices of detached homes slouching from earlier this year it has been surprising to see the GTA condo market’s unrelenting resilience in the midst of it all. In fact, many including the market watchers will tell you that it’s a truly surprising turn of events considering all the turmoil that the housing market is encountering.
With all the steps taken to slow it down the condominium market still seems to emerge triumphant in the housing market improvement. On the other hand, economists and property developers have also expressed their concerns regarding the condo prices saying that they cannot keep on increasing at such an infuriated pace because their affordability contrasted to the single-family domiciles is what brought about their popularity initially. Yet up until now, there is still a looming craze for condominiums as that gap still remains large.
Nevertheless, although things seem to be going quite well there is likely to be a change in the very near future for those looking to rent out their units. With the rent control measures in place and the recent interest rate hikes, those that buy the condos for a guaranteed monthly rental income may find the market a little less attractive than they’d imagined. How so?? Well, with the two rate hikes imposed by the Central Bank over the past 3 months borrowing costs have increased significantly. And as if that not enough, the provincial rent controls that were unveiled in April are also limiting the income potential considerably.
Nonetheless, the paucity of enough terrain for putting up detached homes is still going to continue fueling the building capacity of condominium apartments. And as we are all well aware, the condominium market is vital for the real estate market in Toronto. More so because multiple entity structures account for about 40% of the housing statistics in Canada and about 53% in Toronto. Moving forward also, there is a high possibility that by 2018 62% of Toronto’s groundbreaking will be multiples. With this supply will there be demand? You bet! Condo life represents easy commutes, walkability and a maintenance free lifestyle that prospective buyers now a days are looking for.
