Toronto’s real estate market has taken a significant hit in the first half of this year, with new condo sales plummeting to their lowest level since 1997. According to a recent report, the number of new condo units sold in the city has dropped by a staggering 85% compared to the same period last year.
The report, released by real estate consulting firm Urbanation, reveals that only 1,385 new condo units were sold in the first six months of 2021. This is a sharp decline from the 9,055 units sold during the same time frame in 2020. The drop in sales is attributed to a combination of factors, including the ongoing COVID-19 pandemic, economic uncertainty, and stricter mortgage rules.
Experts believe that the pandemic has played a significant role in the decline of new condo sales. With many people working from home and the closure of non-essential businesses, the demand for downtown living has decreased. This has resulted in a surplus of available units, leading to a decrease in prices and a slowdown in new construction projects.
In addition, the stricter mortgage rules introduced by the federal government have made it more challenging for potential buyers to secure financing. This has further contributed to the decline in new condo sales, as many buyers are unable to meet the stricter requirements.
The report also highlights the impact of the pandemic on the rental market. With a decrease in demand for downtown living, the rental market has also been affected, with a record-high number of available units and a decrease in rental prices.
Despite the significant decline in new condo sales, the report also notes that the average price per square foot for new condos has increased by 7.2% compared to last year. This is due to the limited supply of new units and the high demand for larger, more expensive units.
While the first half of 2021 has been challenging for the Toronto real estate market, experts remain optimistic about its recovery in the second half of the year. With the easing of pandemic restrictions and the gradual return to normalcy, it is expected that the demand for downtown living will increase, leading to a rebound in new condo sales.
In conclusion, the first half of 2021 has seen a significant decline in new condo sales in Toronto, with a combination of factors such as the pandemic and stricter mortgage rules contributing to this decline. However, experts remain hopeful for a recovery in the second half of the year as the city continues to navigate through these challenging times.
