Toronto condo prices drop year-over-year, but market expected to tighten in 2024: report

If you’re looking to buy a condominium in the Greater Toronto Area, now might be the time, according to newly released data.

In a report published Thursday, the Toronto Regional Real Estate Board (TRREB) said although condo sales were up year-over-year, that increase was “far outstripped” by a growth in the number of units listed.

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According to the data, 4,415 condo sales were processed in Q3 of this year, up 6.2 per cent from 2022.

During the same period of time, TRREB said, new listings for condos were up 28.8 per cent.

That increased supply also meant lower prices, which is good news for buyers looking to break into the market, TRREB said.

In the GTA, the average selling price for a condo in the third quarter of 2022 was $720,628. In 2023, the average price was $716,145.

Price drops were more evident in Toronto proper, where TRREB said the average price for a condo was $736,566 – down from 750,087 a year earlier.

“The condominium apartment market is an important entry point into home ownership for first-time buyers. A better-supplied market has led to more choice for these buyers, resulting in more negotiation power and lower selling prices on average,” TRREB President Paul Baron said in a news release.

Baron went on to say that the “pause in price growth” has helped to ease the pain of higher monthly mortgage payments – which remain stubbornly high as the Bank of Canada aims to tamp down inflation.

On Wednesday, the central bank held its key interest rate at five per cent, the highest level seen since 2001. The rate has remained at five per cent since July 12 as the Banks of Canada’s tries to slow the economy and bring the inflation rate down to its goal of two per cent.

• READ MORE: Bank of Canada interest rate decision explained

But the relief felt from a marginal drop in prices will likely be short-lived, according to TRREB’s chief market analyst Jason Mercer.

“While condo market conditions have become more balanced over the past year-and-a-half, we will likely start to see a tightening in the market in the second half of 2024,” Mercer said.

However, Mercer said it is the “consensus view” that borrowing costs will see “some relief” at the start of that year and “even more so” in 2025, assuming the Bank of Canada’s targets are met.