May 2024 Toronto Buyer’s Market in Condos: Let’s Make a Deal

Toronto Condominium Sales Slowdown

The Toronto condo market has experienced significant changes over the past year, with trends suggesting a clear shift towards a buyer’s market. As I analyze the data and insights from various sources, it becomes evident that the once fiercely competitive market is now presenting more opportunities for those looking to purchase a condominium in the Greater Toronto Area.

Moderate Sales Growth and Increased Listings in the Buyer’s Market

In the first quarter of 2024, the GTA saw a moderate 5.3% year-over-year increase in condominium apartment sales, totaling 4,747 units. While this growth is noteworthy, it was outpaced by a significant 23% increase in new condo listings during the same period. This disparity between sales and new listings suggests that the market is becoming more balanced, with buyers having more options to choose from in this emerging buyer’s market.

The increased supply of condos is a welcome change for buyers who have faced intense competition and bidding wars in previous years. With more units available, buyers in this buyer’s market can take their time to find the perfect home without feeling pressured to make hasty decisions.

Slight Price Decreases and Affordability

The average condominium selling price in the GTA experienced a slight 1% decrease in Q1 2024, dropping to $693,754 from $700,704 in Q1 2023. In the City of Toronto, which accounted for nearly two-thirds of total condo sales, the average selling price decreased by 0.5% year-over-year to $723,186.

While these price decreases may seem modest, they indicate a shift in market dynamics, contributing to the buyer’s market. As more inventory becomes available and competition among buyers eases, sellers may need to adjust their expectations and pricing strategies to attract potential buyers.

Furthermore, the slight price decreases, combined with the prospect of lower interest rates in the near future, could make condos more affordable for first-time buyers who have been priced out of the market in recent years, further solidifying the buyer’s market.

Shifting Market Conditions and Record-High Inventory in the Buyer’s Market

As of April 2024, the sales-to-new-listings ratio for condos in the GTA has fallen below 40%, signalling a clear shift towards a buyer’s market. This ratio is a key indicator of market balance, with a ratio below 40% generally favouring buyers.

Moreover, the number of condos for sale in Toronto reached a record high at the beginning of May 2024, as inventory levels continue to rise. This abundance of choice is a stark contrast to the limited options buyers faced in previous years, when competition was fierce and units were quickly snapped up, further emphasizing the current buyer’s market.

The increased inventory levels in this buyer’s market provide buyers with more negotiating power and the ability to take their time in making informed decisions. Sellers, on the other hand, may need to be more flexible in their pricing and open to negotiations to stand out in a buyer’s market with ample supply.

The Impact of Interest Rates and First-Time Buyers on the Buyer’s Market

The Toronto Regional Real Estate Board (TRREB) predicts that as interest rates trend lower, more first-time buyers will enter the market, particularly those who are currently renting and facing rent increases. This potential influx of first-time buyers could have a significant impact on the condo market.

As borrowing costs decrease, the affordability of condos will improve, making homeownership more accessible to a larger pool of buyers in the buyer’s market. This increased demand from first-time buyers could help absorb some of the excess inventory and lead to a more balanced market.

However, it is essential for first-time buyers to be well-prepared and informed when entering the market. Seeking professional advice from real estate agents and mortgage specialists can help navigate the process and make sound financial decisions in this buyer’s market.

Future Outlook and Market Conditions

As we look ahead, the Toronto condo market is expected to continue evolving. TRREB’s Chief Market Analyst, Jason Mercer, predicts that as first-time buying activity increases with lower borrowing costs later in 2024 and into 2025, inventory will be absorbed, and market conditions will tighten.

This tightening of market conditions could lead to increased competition among buyers and, consequently, upward pressure on selling prices. While the current market favors buyers, it is crucial to keep an eye on these potential shifts and be prepared to adapt accordingly.

Buyers who are currently in the buyer’s market or planning to enter soon should take advantage of the increased choice and slightly lower prices while they last. Conducting thorough research, setting realistic expectations, and working with experienced professionals can help ensure a successful home-buying journey in this buyer’s market.

Conclusion

The Toronto condo market is undergoing a significant shift, with trends pointing towards a clear buyer’s market. Moderate sales growth, increased listings, slight price decreases, and record-high inventory levels have created a more favourable environment for buyers, particularly first-time homebuyers, in this buyer’s market.

As interest rates are expected to trend lower, the affordability of condos may improve, attracting more buyers to the buyer’s market. However, it is essential to stay informed about market conditions, as the dynamics can change quickly.

For those considering purchasing a condo in the GTA, now may be an opportune time to take advantage of the increased choice and potentially more favourable pricing in the buyer’s market. By working with trusted professionals and conducting thorough research, buyers can navigate this shifting buyer’s market with confidence and find the perfect home to suit their needs and preferences.

If you’re ready to navigate the Toronto real estate market with a trusted expert by your side, I’m here to guide you every step of the way. With over 17 years of experience in the heart of Toronto’s most coveted neighbourhoods, I offer a blend of comprehensive market knowledge, dedicated 24/7 support, and a suite of innovative tools like DoorScore.ca to empower your decisions. Whether you’re contemplating buying, selling, or simply seeking professional advice, connect with me, David Silverberg, for a real estate experience that not only meets but exceeds your expectations. Let’s turn your real estate goals into reality. Contact me today and take the first step towards unlocking the full potential of your real estate journey.

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