A Five-Year Forecast on Toronto’s Condo Real Estate Market

13 September 2019
Robert Greenberg Team

Downtown Toronto

If you haven’t been following Toronto’s new condominium market over the last decade, here’s a quick recap:

  • Starting in 2009, the crumbling U.S. housing market and global contagion had Toronto real estate developers on pins and needles. Because of the apprehension, forecasts suggested 4,000 new condo sales in the GTA that year, with 930 sales in the first quarter. 
  • Confidence turned mid-year, resulting in surpassed projections of 16,000 condos sold in 2009. 
  • With continued growth, buyer’s confidence peaked in 2011, with sales reaching 28,000 condos. 
  • By 2012, however, a combination of offshore capital, overvalued suites, and over-leveraged buyers was rampant, leading a slower market for the next two-and-a-half years.
  • The aftermath of the 2011 boom, which was expected to be a U.S.-like downward spiral of oversupply, panicking investors, and a crash in values, never came to pass.
  • Instead, condo sales in the GTA solidified in 2015, and have remained strong…

That brings us to today. Condo sales are booming; even with a seemingly unsustainable 35 per cent gain in 2017, there’s been no drastic market correction or slump. Condo demand and values continue to soar.

But will this trajectory continue steadily over the next five years, or is that expected market correction on the horizon?

It’s difficult to project, as a number of contingencies will come into play that’ll shape the future of the new condo market in Toronto. 

For example, can investors still make money buying up all these $1,300 per-square-foot condos? Will more luxury Toronto condo projects surface? Will there be fewer projects, but bigger ones, similar to the 85-storey uber-developments funded by institutional capital, like we see in New York? Will we see the rise of co-living?

In order for the market to remain strong and stable, developers must exercise discipline in purchasing land without overpaying, which would drive end-selling prices to ludicrous levels if they do get overzealous.

Likewise, investors must have similar patience to research all options, understand the merits of each potential new development, and support fair-price new Toronto condo projects, while evading overvalued developments. 

The Toronto real estate market didn’t erode in 2017 after its bubble-like price growth. But that’s seemingly an anomaly – history suggests it won’t survive the next bubble, if and when it comes. 

If you’re interested in investing or purchasing a condo in Toronto, Robert Greenberg has successfully helped buyers find the home of their dreams for the past 35 years. Get in touch with Robert Greenberg and his experienced team of Toronto realtors if you’d like help finding that perfect condominium in Toronto.