According to the Toronto Real Estate Board, December brought a slight increase in the price of Toronto condos. However, due to a drop in sales activity and a growth in inventory, a slowdown is expected in the near term, reports Better Dwelling.
Benchmark vs. Median – Why the Difference?
The benchmark price of a condo across the GTA was $468,200 in December, 0.90% higher compared to the previous month. On a year-over-year basis this represents a 21.38% growth. The price of a Toronto condo for sale rose to $490,500 in December. This represents a 0.88% growth from November. In raw numbers these gains are spectacular, with Better Dwelling reporting that condos made more money than their inhabitants: $4,200 in a month for all TREB regions and $4,300 in the city. On a year-over-year basis, the price rose by 23.34%.
In December, the median sale price for condos across all TREB regions was $446,220. Compared to November it dropped by 0.83%. However, on a year-over-year basis the price grew by 16.29%. For the same month, the median sale price of a condo in the City of Toronto was $472,500, 2.57% lower compared to the month before. On a year-over-year basis the median price for a unit grew by 14.06%.
This difference in the evolution of the median and the benchmark price is related to distribution. Most condos sell in the range of $300,000 to $499,999. Compared to December 2016 when only 55% of condos sold in this range, the number grew to 58% in 2017. However, with more affordable condos (which sell for less than $300,000) becoming more scarce, the benchmark price appears higher, although it does not necessarily reflect an increase in the price of a condo you would want to buy. While in December 2016, condos under $300,000 represented 20% of all units, in 2017 the number dropped to 6.14%.
Sales Are Dropping
In accordance with the market trend, condo sales activity is decreasing. Across all TREB regions there were 9.76% fewer condo sales in December compared to the month before, which translates into 1,562 condos sold. For the same month, but on a year-over-year basis, sales activity dropped by 9.12% in the City of Toronto. Only 1,125 condos were sold in December 2017.
But Inventory is Rising – by 44%
By contrast, inventory is growing. In December, there were 1,579 new condo listings for all TREB regions. On a year-over-year basis this represents a 13% increase. In the City of Toronto, there were 1,085 new listings, which translates into a 11.74% increase from last year. Overall, in December TREB reported a 44.18% y-o-y increase in the number of all active listings. 1,673 of these listings were in the City of Toronto, a number which represents a 31.01% increase over the same period of time.
While declining sales and an ever-increasing inventory will make it harder for prices to grow, potential home-buyers are still facing the problem of finding an affordable condo in Toronto.
Original article published by betterdwelling.com