Slim pickings: GTA condo inventory dropped 63% over the past year
Low inventory levels have plagued the GTA condo market over the past year, but a new report underscores just how limited for-sale units have become.
Real estate agency Strata.ca released the report on Thursday, revealing that the GTA condo market saw a staggering 63% drop in condo inventory over the past 12 months. Last month, there were just 1,415 condos for sale in the GTA — a stark difference from the 3,811 units available in January 2021.
Although winter is typically a slower season for real estate, growing concerns over COVID-19 variants have contributed to would-be sellers holding off on listing their property.
“Omicron is still dominating the headlines, so some of my seller clients are closely monitoring how ongoing restrictions may impact the market,” said Strata.ca realtor Milan Mitrovic. “And then there are others who don’t want to list because they’re simply uncomfortable with people walking through their home when infection rates are still high.
“Whatever the reason, Omicron is making people think twice about listing, which is driving down inventory rates even further.”
As listings plummet, competition over what does come on the market has remained fierce, with many buyers wanting to take advantage of the historically low-interest rates that are in effect right now.
“The message that many buyers are hearing is that interest rates may rise this year, so they better purchase something before getting priced out,” the report, written by Strata.ca Broker of Record Robert Van Rhijn, reads. “But the reality is that interest hikes tend to be very minimal, and historically we do not see increases above a quarter of a percent.”
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This competition has resulted in bidding wars that have pushed real estate prices to record highs nearly every month of the past year.
“In October 2020, prices had dipped to their lowest point since the start of the COVID-19 pandemic,” the report reads. “At this time, units were selling for an average of $678 per square foot (PSF). But since then, prices have been rising rapidly with a condo now costing an average of $910 PSF, an increase of 34% in just 15 months.”
Although prices are unlikely to drop any time soon, Mitrovic is hopeful that the spring will bring some relief as more units come on the market.
“I suspect we’ll see a lot of new inventory in March as sellers look to cash out during the busy spring market,” Mitrovic said. “Many of those buyers will have purchased something and exited the market by spring, leading to less competition and a fairer playing field overall.”