Analysts say low interest rates and a light at the end of the COVID-19 tunnel is driving demand for condos in the city, and sales were picking up speed in Q4 2020.Condo sales totalled 6,649 in Q4, increasing by 20,7% YoY, but the average selling price decreased by 1.1% in the GTA and decreased by 2.4% in Toronto, likely due to a rise in supply from investors selling.
Strong condo sales spilled over into the month of January 2021, and YoY sales increased by 92%, which shows sales nearly doubled the activity of 2020. While condo sales were quite strong in December of last year and the month of January 2021, new condo listings also increased by 66%. Rental vacancy rates are also at record highs. The variables into the Toronto condo market are those of high vacancy rates, increased new condo listings, and strong condo sales.
Demand in Toronto's core has remained high throughout the pandemic, and buyers have been frustrated at how quickly properties are selling with offers well above asking price. While demand hasn't dropped in the downtown core through the pandemic, the demphraphic of buyers has changed because there aren't as many foreign buyers. Buyers should closely consider the neighbourhood of the city they'd like to live in, as prices for condos out of the immediate core have started to catch up with more central locations.
It's a good time to buy if you're planning on actually living in the property. For seasoned investors, the market is ripe opportunity to expand your real estate investment portfolio. Once activity ramps up mid-2021, condo prices may rise to new levels. Buying now provides the benefit that new condo prices are still quite competitive.