Sure, the housing market is slowing across Canada. Recent data shows that national housing starts — the number of shovels hitting the ground to build new housing stock — is the lowest it’s been in two years, but that doesn’t mean sales activity in the GTA has dried up. Quite the contrary.
Those shopping for single-family homes may be able to find much better deals these days, but shoppers looking for a condo or townhouse in the GTA are probably still running into a few of their nemesis: Too much demand, too small a supply and continued bidding wars.
Turns out only slightly more than a quarter (28%) of the 65 areas and communities in the Greater Toronto Area are in a buyer’s market. Turns out almost a third (32%) are actually in a seller’s market, while the majority of Greater Toronto’s communities — at 40% — are actually in a balanced market when it comes to the supply and demand of condos and townhouses.
Here’s the current market snapshot for condos and townhomes in the Greater Toronto Area:
Share this Image On Your Site
Key takeaway: First-time buyers may find a bargain if shopping for condos or townhouses in the GTA!
For a few good bets, consider the following (ranked based on the market absorption ratio):
5 Top Areas in the GTA that Favour Condo and Townhouse Buyers (ranked in order, based on market absorption ratio)
- W07 (Stonegate – Queensway)
- E06 (Oakridge, Birchcliffe – Cliffside)
But what if you’re trying to sell your home in the GTA? What areas are still hot? What areas are still sitting in a seller’s market, where bidding wars should still be expected and pricing won’t adjust because demand is still high. Here are the neighbourhoods that currently favour sellers (based on market absorption rates):
5 Top Areas in the GTA that Favour Sellers
- W01 (High Park – Swansea, Roncesvalles, South Parkdale)
- E02 (The Beaches, Woodbine Corridor, East End – Danforth)
For comparison, check out last month’s GTA Market Report for condos and townhouses.
Why use active listings versus new listings?
We examined the GTA market for single family homes using the sales-to-active listings ratio and not sales-to-new-listings (SNLR) ratio. This means we compare demand — all homes sold within a given period of time — with current supply (all homes available for sale within a given period of time), without omitting stale listings — homes that weren’t new listings that month, but are still available because they haven’t sold, yet.
The sales-to-active listing ratio gives a more realistic and comprehensive view of supply and demand for a particular region over a specified period of time — commonly referred to as the market absorption rate. It’s also why the sales-to-active-listings ratio is also known as the Market Absorption Rate.
Expressed as a percentage, the sales-to-active ratio (or MAR – Market Absorption Rate) is calculated by taking the total number of sales at the end of a given time period (in this case, a calendar month) and dividing it by the total number of active listings available during the same time period. The higher the ratio, the more demand for the property and the more opportunity a seller will have to attract a higher price for their home for sale. A lower ratio indicates slower sales and the potential for falling house prices. A balanced market is when the supply of housing meets the demand from potential buyers. In a balanced market, sellers usually accept reasonable, close-to-list-price offers; homes typically stay on the market for close to the average number of days and prices remain fairly stable within the region.
According to the Toronto Real Estate Board, a market is balanced territory when the sales-to-listings ratio is between 35% and 55%. Ratios above 55% indicate a seller’s market, while ratios below 35% indicate a buyer’s market.