Toronto’s /Montreal’s thriving housing market is beginning to show signs of strain, particularly in a condo segment suddenly flooded with new listings.
September data from the Toronto Regional Real Estate Board and research firm Urbanation Inc. show a surge of units for sale, the beginning of a weakening trend for condos, along with a sharp decline in rents. That’s in spite of a boom in other segments such as single-family homes in Canada’s financial capital.Bloomberg Markets Toronto home prices hit new record as sales surgehttps://imasdk.googleapis.com/js/core/bridge3.416.2_en.html#goog_1148578896Volume 90% Toronto home prices hit new record as sales surge
Home sales in the Greater Toronto Area surged 42.3 per cent year-over-year last month, taking activity to a new all-time high for September. Meanwhile, the average selling price reached $960,772, setting a record for a fourth consecutive month. BNN Bloomberg’s Greg Bonnell has more.
Active listings of condos in downtown Toronto hit a record at the end of September and were 215 per cent higher than a year earlier, according to Urbanation data. That compares with just a 5.3 per cent rise in total housing listings across the city during the month, according to TRREB data released Tuesday.
The trend means condo prices in October will likely fall on an annual basis, Urbanation President Shaun Hildebrand said. “Demand is just not keeping up with new supply right now,” he said.
The weakness suggests the rosy picture for real estate that emerged over the past few months may be overstated in a city that UBS Group AG says is among the world’s most vulnerable to a “sharp correction.”
Across the Toronto region, owners listed 6,480 condos for sale in September, up from 5,599 in August and 3,403 in the same month a year earlier, TRREB reported Tuesday. With sales not keeping up, benchmark prices fell for a second straight month and are down 1.8 per cent since May, even as values for detached homes have surged over that time.
The decline in rents has been more dramatic, with the cost of leasing unfurnished units in the Greater Toronto Area down 11 per cent from a year earlier in September, according to Urbanation. That’s the biggest year-over-year decline on record.
Lackluster demand for condos is beginning to act as a drag on the overall Toronto housing market, with total home sales falling on a seasonally adjusted basis in September for the first time in five months.
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