Buying a Condo in Toronto: What the Charts Actually Say

The average price of Toronto condos has dropped about 14% from March 2022 to now, October 2024. If you own a condo or you are thinking about buying one, you probably already have a feel for how prices and sales are moving in this market. I'm Moe Asgarian, Principal Real Estate Broker in Toronto and ranked #47 worldwide at RE/MAX. In this video I want to walk through the charts and the real story behind Toronto's condo market.

This is an important market, because prices here are lower, it has always been an attractive entry point for buyers. First we will review the charts of the last two or three years, then talk about the sales numbers, and at the end I'll tell you where I think all of this leaves buyers and sellers.

The Price Chart: From the Peak to Now

Everyone knows condo prices in Toronto have come down a lot. The question is where the trend started. Go back to March 2022, when the average condo price was $831,000. After that you start to see the effect of rising interest rates: prices come down overall, with plenty of swings along the way. By January 2023 the average hit its lowest point. Early 2023 the market got better and prices rose for a few months, then summer rate hikes pushed them back down.

From April onward we saw a drop every single month. By August the number was $681,000, about an 18% drop from the peak. September it climbed a bit to $707,000, which is roughly the same level we saw at the bottom of 2023.

Sales Volume: Fewer Deals Through 2024

Now to the number of condos bought and sold in Toronto. Look at March 2022 and more than 2,000 condos sold that month. As rates rose, that count got smaller and smaller. When the market picked up again, deals picked up too. What's interesting is that even while average prices were climbing toward the peak, volume stayed high, so rising prices did not stop people from buying and selling.

In 2024 it shifted. April had 1,300 sales, May was a bit lower, June dropped to about 1,000, and by the late summer it was even lower. September ticked up slightly. Both volume and average price started coming down together in April, where in past years the spring market would normally be growing.

Inventory: The Most Telling Chart

The third chart is months of inventory, and this is the important one. In February 2022 inventory was tiny, barely a month's worth. As we move forward that number climbs and climbs. By March 2023 we had about 3 months of inventory, which you could call a fairly healthy market. But it kept rising, reaching 4.8 months by August. Look at the city of Toronto numbers for September and inventory is close to 7 months.

Downtown the picture is sharper. Inventory there has reached around 7.5 months. Condos that do sell are getting roughly 99% of their asking price, but the share that actually sells is very low: fewer than 15% of downtown listings find a buyer each month. In the east end of downtown, months of inventory has hit 10. That is a lot of condos sitting and waiting to sell.

What This Means for Buyers Right Now

At first glance, all that inventory looks like a great moment for condo buyers: lots of choice, time to pick, and a chance to buy the best one at a good price. But there are a couple of things to keep in mind. Prices are coming down, so a buyer might reasonably say, I'll wait for them to come down more, and they might be right. That's why the best buy in this market is one that genuinely feels flawless and like a real deal. If you're only 50% sold on a condo, don't even think about buying it. Buy something that scores very high, and buy it with the goal of holding for at least 5 years.

Don't be fooled by how many condos are on the market. Honestly, maybe 20 out of every 100 are even worth thinking about. The rest either aren't good quality, or they're investor units priced too high, which obviously aren't worth buying. So be selective. I expect prices to keep easing a little through the rest of 2024, even with rate cuts and the new mortgage rules starting. I don't mean prices will halve or drop 20 to 30%, but maybe something around a 5% slow decline. A condo is still an expensive item for a lot of buyers, and it still doesn't feel affordable to them.

Looking Ahead to 2025

Every year without exception, a lot of condos come off the market at year-end. Units that couldn't sell by mid-December get delisted, the seller says we couldn't sell it this year, and they pull it to try again later. So expect months of inventory to come down. At the same time, I think the new first-time-buyer mortgage rules will start affecting the market early in 2025, giving some of the buyers who were afraid to jump in the courage to do it. With rates coming down too, that adds up to motivation for renters thinking about their first condo.

In short, I don't think next year starts with much excitement, but two big things can happen: fewer condos on the market and more motivation for buyers. Prices should start rising slowly through 2025, and by year-end we may see the average condo price recover enough that the market gets a second wind. I was at the RE/MAX annual conference in downtown Toronto recently, and the keynote was Benjamin Tal, deputy chief economist at CIBC. On condos he said how cold the market is right now, but his take was that we have roughly a 12-month window to buy. His forecast: with rates falling, by the end of 2025 we reach about 2.5%, and at that point demand climbs so high the market turns competitive. That lines up closely with what I hear from the key people in this market, so I think you can plan around it.

If you're thinking about buying a condo, you can use this window and this market to make a really good purchase and, over a defined period, earn a solid return. If you'd like a straight answer for your own situation, fill out the form below and book a free consultation. Stay well and take care.