Toronto Real Estate Market Update | July 2023

Hey there, Toronto real estate enthusiasts! Josh Broker here from SAGE Real Estate and Garrison Collective with the latest market update for July 2023. The Toronto Real Estate Board just released their numbers, and we're diving into the key insights that you need to know. Whether you're a seasoned investor or a potential homebuyer, this update is packed with valuable information.

Condo Prices and Rental Rates

In the city of Toronto, condo prices have been on a slight decline for the past few months, and the trend is continuing. However, rental rates are skyrocketing! The average one-bedroom unit is now renting for almost $2,600, showing a substantial 14% increase year over year. For two-bedroom units, the average rent is $3,300, and in downtown Toronto, it's even closer to $4,000, marking an 8.8% increase year over year. With rental demand outpacing housing supply, it's no surprise that rental rates are expected to keep rising.

Renting vs. Buying: The Condo Opportunity

Considering the current market dynamics, there might be a better opportunity right now in the condo market compared to purchasing a house. The price to hold a condo is much closer to the current rental rates, making condos an attractive investment option. If you're looking for potential investment value and want to avoid overextending yourself financially, condos are worth exploring.

Market Analysis: What's Behind the Average Price Increase?

While it's true that the average price in the greater Toronto area increased by 4.2% year over year, it's essential to understand the contributing factors. Demand has been high this year, as buyers have come off the sidelines after last year's interest rate shock. Additionally, people with existing pre-approvals rushed to purchase real estate before their rates expired. However, we also see fewer homes in the less expensive price segments trading last month, contributing to the elevated average prices.

Future Price Trends

When looking ahead, the market seems to be following a similar pattern to last year. Prices increased steadily from January to May but have started coming down since then. Barring any significant economic shifts, it's unlikely we'll see substantial price growth in the coming months. So if you're considering a real estate investment, it might be a good time to explore the condo market with its potential for growth.

Conclusion

In summary, the Toronto real estate market continues to be dynamic, with condo prices experiencing a slight decline while rental rates soar. There are opportunities to be found in the condo market, offering potential value for investors and homebuyers alike.