Much of the market pressure is coming from the region’s depleted condo inventory
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Toronto’s condos saw an ample growth in value during the first seven months of the year, making it more difficult for more households to afford these properties.
“Low inventory levels are putting upward pressure on price per square foot in the Greater Toronto Area, especially for entry-level properties like condos,” according to Tom Storey of Royal LePage Signature Realty.
In the January-July period, the asset class experienced a 9.1% annual increase in price per square foot, up to $743. To compare, single detached homes had a significantly muted 1% year-over-year increase, up to $486 per square foot.
As for the aggregate price across all property types, this increased by 6.1% annually to $782 per square foot.
Data from Royal LePage’s wide-ranging condo market report also showed that in the city of Toronto, condo units had a median floor area of 752 square feet, roughly half that of single-family detached homes (1,512 per sq. ft.).
Moreover, moving from condos in the downtown core to in the rest of the GTA only has a 4% increase in their median living areas (783/sq. ft.). In stark contrast, the increase in the single-family detached segment would’ve been around 32% (2,000/sq. ft.).
“Millennials know what they want and, in some cases, are willing to pay more for less space in order to be in their desired neighbourhood. This is consistent with the trend of location being an increasingly important aspect of home ownership in today's market,” Storey explained.
