Navigating the Balance: An In-depth Look at GTA’s Condo Market in Q3 2023
Condo Market Update for Q3 2023
The third quarter of 2023 has unraveled a different pace in the Greater Toronto Area’s (GTA) condominium market, painting a picture of a more balanced market landscape compared to the previous years. According to the Toronto Regional Real Estate Board (TRREB), the quarter saw a total of 4,415 condominium apartment sales, marking a 6.2% increase from the same quarter in 2022. However, the spotlight falls on the surge in new condo listings, escalating by a striking 28.8%, overshadowing the growth in sales and steering the market towards a more balanced outlook.
The average selling price for a condominium apartment GTA-wide was $716,145 in Q3 2023, a marginal descent from $720,628 in Q3 2022. In the heart of Toronto, which accounted for approximately two-thirds of condo apartment sales, the average selling price retreated to $736,566, down from $750,087 in the previous year (GlobeNewswire). This moderation in prices comes as a relief amidst a backdrop of rising borrowing costs.
Delving into the rental sector, the average lease rate for a one-bedroom condominium apartment in Q3 2023 was $2,633, up by 6.1% compared to Q2 2022. Similarly, the average lease rate for a two-bedroom condominium apartment was $3,430, marking a 7.8% rise compared to Q2 2022 (TRREB). Despite the softening in selling prices, the rental market continues to show a robust performance.
The broader housing market in the GTA also mirrored a notable trend. September 2023 witnessed the average home sold price in the GTA increasing by 3% year-over-year to $1,119,428. Interestingly, this period marked Toronto entering a deep buyer’s market territory for the first time in 14 years, with home prices continuing to increase both on a monthly and annual basis (WOWA).
The condo market dynamics are also reflecting a shift in the selling strategies. A noted change in the listing strategies amidst a softened market has been highlighted, where a significant number of condos, especially in the downtown core, have moved from a “low-price, offer date” strategy to an “offers any time” approach, signaling a shift in market temperament and seller expectations (Toronto Realty Blog).
Here, it's worth emphasizing the dwindling success of the offer presentation date strategy among sellers. This tactic, once a lever to attract a pool of potential buyers, is losing its charm as the foot traffic for showings has seen a decline. The essence of the offer presentation strategy lies in the numbers game—driving a good volume of viewers to eventually funnel into a more serious pool of buyers. However, with the volume of viewings not being at par with previous levels, the strategy is not yielding the desired success. Sellers adopting an “offers any time” strategy by pricing their homes at market value versus underpricing are navigating through this buyer's market with a far better stance, aligning with this market's current temperament.
On a concerning note, the reluctance among many property owners to list their properties, fearing the price drops, juxtaposed with some investors being possibly nudged to sell due to higher borrowing costs, portrays a complex picture of the market dynamics at play (CBC News).
Looking ahead, the condo market in Toronto is down by a relatively smaller 12% from its peak, still standing 3% higher than the 2021 average. However, the massive rate hikes have led to a year-over-year drop in condo prices, which is a trend worth keeping an eye on as we navigate through the remaining quarter and step into 2024 (Elevate Partners).
In conclusion, the unfolding dynamics in the GTA’s condo market present new angles for both buyers and for sellers. The trend of increasing listings, moderated selling prices, and the contrasting robustness in the rental market, coupled with the evolving selling strategies, depict a market in a period of transition. If you find yourself in need of professional advice or simply have questions about the real estate market in Ontario, please don’t hesitate to reach out to me. I’m Axel, I’ve been a Realtor since 2016, and I'm here to assist with your all your real estate needs. Please feel free to reach out at any time; I’d be more than happy to chat with you and provide the guidance you need for a smooth real estate journey.
Condominium Apartment Market Summary Q3 2023 versus Q3 2022