According to Toronto Real estate Board (ie: TREB) Toronto condo prices have gone up 28%
Toronto Real Estate Board data shows that 8,223 condo apartments were sold between March and June, down 8% from the same period of 2016. The average selling price continued rising sharply though, up 28.1% to $532,032 for the TREB market area as a whole and to $566,513 for the city of Toronto.
Many people are wondering why condo prices are still going up. The answer is quite simple. It comes down to affordability and the mortgage rule changes that the government has made over of the last 18 months. The new mortgage rules have skyrocketed the price of homes in the GTA and particularly the price of condos.
There are a few reasons why
One of the mortgage rules put in place is: if you have less than 20% down and you need mortgage insurance (CMHC), your max purchase price is $999,999. So naturally, a lot of condos fall into that price point, for now at least. The average price per square foot continues to go up at record rates simply due to condo affordability.
Most clients who are buying a condo either have less than 20% down, or only qualify for a mortgage under $1,000,000; therefore, the demand is at an all time high.
Another mortgage rule change which came into effect in the fall of 2016 was the Stress Test. This means a client who is applying for an insured mortgage (ie: a purchase with less than 20% down payment) must qualify for that mortgage based on the 5yr fixed posted rate (4.84% as of today) and a max amortization of 25yrs. This stress test instantly lowers a buyers max. mortgage by 18% on average. That is a huge impact.
Regardless of the continued mortgage rule changes, the fact of the matter is this… Toronto and the GTA is an amazing place to live and work, and Canadians love to own their home. We have a lot of young professionals and down-sizers looking for condos for either affordability, location or a lifestyle change. All of these factors equal massive demand; thus, condo prices continue to climb at staggering rates. This is the beginning of the Manhattanization of Toronto.
The condo boom or bust predictions of 2011 and 2012 seem to be off again.
For more info on Toronto condo prices or to see what you qualify for, contact a Mortgage Professional at Mortgages.ca.