Toronto’s housing markets have entered a period of relative slowdown, with 2018 sales falling by around 40% to settle at 25,161 transactions, according to new data from the Altus Group.
“Real estate investment in general had a bit of a quieter year after an exceptional 2017,” Altus vice president (data solutions) Matthew Boukall said. “We expect the downturn will be short-lived, with the rebound in homebuying intentions, the pause in interest rate increases and continued interest in commercial real estate as an investment asset class.”
Single-family properties, in particular, suffered the worst fall, with a 50% annual shrinkage to 3,831 sales. This was a staggering 74% lower than the 10-year average.
Altus numbers also showed condo transactions declining by 38% year-over-year to 21,330 sales. While this was only 4% below the 10-year average, further figures from a separate report by Urbanation indicated more volatility ahead as considerable weakness will also be seen in the supply side this year.
The total number of condos slated for completion in 2019 is at a record high of 21,991 units, representing a 29% annual increase.
Read more: Population growth a major driver in Toronto housing activity – TREB
“Even with some moderate increases in contributions from purpose-built rental buildings, new condos will remain the primary source of the additional housing needed to accommodate a growing population base. This will keep both end-users and investors active in the market,” Altus acknowledged in its report.
“The slowdown in activity last year can partly be attributed to less demand from investors, who typically represent the largest component of new condominium purchasers [in Toronto],” Urbanation noted – and adding that competition in this space will still be fierce, as 98% of the new units were already pre-sold, and more than half of this new supply has been snapped up by investors.