GTA condos to lead price growth in 2022 as houses become even less affordable
As the dream of owning a house becomes less and less attainable in the GTA, condos are expected to take off this year, leading the charge in price growth.
A new report from Zoocasa found that at the moment, the price gap between detached homes and condos is the second-highest it’s been in recent history. Over the past 10 years, the average detached home price in the GTA was roughly double the average condo apartment price. But now, the ratio has moved up to 2.33 times the price.
Suburban homes became the target of many aspiring homebuyers during the pandemic who were looking for more space as they spent more time at home. But limited listings and increased competition over these properties drove prices up so high that they’ve pushed many would-be buyers out of the detached home market. That, coupled with the fact that the Bank of Canada is expected to raise its historically low interest rates this year, is prompting Zoocasa to predict a larger price growth in the condo market in 2022.
“We saw this phenomenon play out in 2018 when interest rates rose last,” the report reads. “During this time period, sales velocity in the Toronto Region was down across all product types, but price growth was highest amongst condo townhomes and apartments, which grew by 9% and 10% respectively that year. Comparatively, detached homes grew only 4% during that same period.”
With a recent loosening of lockdown measures and an upcoming removal of the vaccine passport system, city living will become more desirable, the report says.
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Although homes continue to sell extremely quickly and prices are still on an upswing, Zoocasa realtor Ross Aitken says that the meteoric rises seen last year likely won’t repeat themselves.
“Heading into the new year, major bodies like the Toronto Regional Real Estate Board are expecting price appreciation to moderate from the record pace we saw in 2021, and rising interest rates will only make the most affordable homes on the market more attractive,” Aitken said. “I’m anticipating that we’re going to see a big year for condos in the region.”