Modest price drops are also at play
The Greater Toronto Area’s (GTA) condominium market continues to adjust to high borrowing costs and record immigration, with a notable uptick in rental activity in the third quarter of 2024.
In the third quarter of 2024, condo sales dropped by 4.4% year over year to 4,204 units, according to the Toronto Regional Real Estate Board (TRREB). The number of condo rental transactions jumped 29.2% year over year, with 18,540 units rented in Q3.
“Many newcomers to the GTA initially choose to rent a home,” said TRREB president Jennifer Pearce “Given the record pace of immigration, it is no surprise that the number of rental transactions continues to trend upwards.
New condo listings climbed 10.6%, giving buyers more choices and slightly reducing prices. At the same time, new rental listings also saw a substantial rise, up 46.6%, which has provided renters more options and resulted in modest rent reductions. The average rent for a one-bedroom condo dropped 5% to $2,499, while the average two-bedroom rent dipped 5.6% to $3,216.
The average condo price in Toronto fell to $713,801, down 3.3% from last year’s average of $737,035.
“In recent months, these renters are benefitting from much more negotiating power, due to an increase in listing supply. This has resulted in a more affordable rental market,” Pearce said.
Looking ahead, TRREB chief market analyst Jason Mercer anticipates tighter condo market conditions in 2025 as interest rates stabilize and potential buyers regain confidence.
“As condo market conditions start to improve in the months ahead, we will start absorbing the large standing inventory of listings that built up over the past year,” he said in the report. “Ultimately this will lead to tightening market conditions and renewed price growth, but this will become more of a story as we move through 2025.”
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“While condo sales remained low in the third quarter, market conditions are expected to improve. As the positive impact of interest rate cuts continues to grow, a growing number of renters will likely make the move into homeownership,” said Pearce, adding that potential buyers could begin taking advantage of improving rates and inventory over the coming months.
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