Condo sales in the GTA go up by 90%

The first 14 days of January saw the GTA’s condo market heating up, as sales through MLS reported an annual gain of 90%.

“We can see a strong demand recovery. Condo listings rose by 66% over the previous year, but it’s interesting to see such a strong demand for condos downtown,” – noted John Pasalis, president of Realosophy Realty. “The second half of 2020 showed quite weak results for the condo market with its prices falling by almost 10%. However, many investors saw it as a great chance to enter the market and benefit from the following listings increase”.

“Investors believe prices will go up in the nearest future, and it’s the main driver for their behaviour.”

The optimism appeared late last year when condo sales in December rose by 75.9% annually in the City of Toronto, says the Toronto Regional Real Estate Board. The reason for such confidence in the condo market was probably news about COVID-19 vaccines distribution.

“In my opinion, the vaccine was a significant issue which probably encouraged many investors to enter the market again in Q4,” – said Pasalis. “Lower prices, the vaccine and recovery caused optimism and helped change the market trend. A bit of optimism made people enter the market. We heard news about the vaccine and that many Canadians could be vaccinated by September, and that encouraged investors.”

While it doesn’t look like vaccination goals will be achieved by the end of Q3, long distribution delays will hardly happen.

Although consumer confidence has recovered the city’s condo market, Pasalis says it may be very fragile and the first quarter of this year will determine what happens for the rest of 2021.

“The first quarter will tell us a lot. In case rents go down further, it will discourage investors from entering the market,” – he noted. However, he says the market will remain buoyant, “if news about vaccines remains positive and people are optimistic about immigration growth.”