A flood of condo units are being listed in Toronto. At the end of May, there were 6,350 active condo listings in the city, an increase of 94 per cent from the previous May, according to Toronto Regional Real Estate Board figures compiled by realtor Scott Ingram. Condo inventory is nearly 70 per cent higher than the 10-year average for last month.
Mr. Ingram said that investors – of which there are plenty in the condo market – are likely facing pressure from variable-rate mortgages that are poised to renew at higher interest rates. Others may be looking to realize their gains in the property market, which has less upside for price appreciation amid steeper borrowing costs.
“The thing that exacerbates all this is you don’t have investors buying right now, because the prospects don’t look pretty,” he said.
In May, there were roughly 1,300 condo sales in Toronto, down 23 per cent from a year earlier, according to TRREB’s monthly report. The average sale price fell 2.3 per cent to around $767,000.
At this time of year, condo inventory typically peaks. But listings have continued to rise in June, according to Mr. Ingram’s tracking of the numbers. He expects more growth, but perhaps at a weaker rate.
In a world with higher interest rates, where investors can earn risk-free returns of 5 per cent, “it does make being a landlord less attractive,” Mr. Ingram said. “Appreciation is not happening. Things aren’t going up 10 per cent a year” like before.
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Matt Lundy