If condo price growth in the Greater Toronto Area continues to increase at this rate, then more buyers will likely start saving just a bit longer in order to buy a single-family home instead.
The recently released Royal LePage House Price Survey says that the average price of a home in the GTA went up 3.7% year-over-year in the third quarter of 2019, hitting $858,443. The median price of a two-storey single-family home increased 2.9% to $989,498, while the median bungalow price went up 1.8% to $811,090.
Now, take a look at the condo market where the median price was $561,144 in Q3-2019. This may seem much more affordable compared to two-storey singles and bungalows, but this median price is also a year-over-year increase of 8.5%. Condo price growth is vastly outpacing other housing types in the GTA. It’s only a matter of time before millennials decide to save up for a single-family home instead.
A Toronto Real Estate Board survey from 2017 found that only 23% of would-be buyers preferred condos. And a recent Genworth survey found that 65% of millennial purchasers bought a single-family home in Toronto. It’s clear that single-family housing is still the dream for many, despite high-density housing near transit actually being the solution to the region’s affordability issues.
The greatest condo price increases were in Mississauga, Toronto, Scarborough, Brampton, and Whitby. Mississauga had the largest year-over-year gain, increasing 9.6%, followed by Toronto increasing 9.2%.
Average home prices actually fell in Oshawa, Ajax, Markham, and Richmond Hill, but not by much. The largest price drop was in Richmond Hill with a 3.2% decrease.
According to Royal LePage, consumer confidence has been lifted due to the recent decline in the benchmark five-year rate to assess buyers’ mortgage eligibility, plus healthy detached home price growth and the launch of relatively affordable new condo projects have brought more people to the market.
Royal LePage does hint at a slowdown though this fall due to the federal election. Some buyers may take a step back to see how the outcome of the election impacts the housing market in the following weeks or months.
Looking ahead to the fourth quarter of 2019, Royal LePage predicts the average home price in the GTA to increase 3.1% year-over -year to $859,301, which is just slightly higher than Q3-2019.