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Toronto’s soaring new condo prices may hurt renters most



Construction cranes at a condominium development site on the north east corner of Cherry and Mill Sts. in Toronto, are photographed on April 5.Fred Lum/The Globe and Mail

Continued sluggishness in sales of new construction condominiums in Toronto is causing short-term pain for buyers and developers, but it could be renters who end up paying the price in the long term.

That’s because the largest source of new rental units in the Toronto region over the past 20 years have been condominium apartments that are leased on the secondary market by condo investors.

However the costs of acquiring and holding onto those unbuilt condos may have reached a point where investors are holding off on buying new condos, particularly if it seems likely future rents will not generate enough revenue – or that equity won’t rise quickly enough to flip – to earn a profit.

Urbanation Inc. reported that new condo sales in the GTA fell 68 per cent in the second half of 2022 on an annual basis, shifting just 5,419 units (an almost 20-year low). Even if those trends don’t continue that equates to potentially thousands of apartments taken out of the rental market in the coming years.


According to Pauline Lierman, vice-president of market research with Zonda Urban, the slowdown appears to be continuing in 2023. “This is the first quarter where we’ve had completions outrun starts,” as multiple developers are delaying new projects or new phases to see if demand picks up.

But there are also warning signs that owners taking possession of those new condos in recent months have been slow to rent them out. In its rental market report for 2022 the Canada Mortgage and Housing Corporation (CMHC) said that while many Toronto condo buildings have seen up to 50 per cent of new apartments leased out in 2021 and 2022 only about 37 per cent of apartments ended up in the rental pool.

That mid-30s lease rate is not unusual according to Ms. Lierman. In fact it’s closer to the historical average. But she is also seeing potential blips in leasing data for new condos in 2023. So far, out of 16 buildings that started occupying during the first quarter, only 929 out of 5,708 units have been leased.

Blip or not, condo apartments are hugely important to Toronto’s rental landscape in ways it can be difficult to appreciate in year-by-year or quarter-by-quarter market snapshots.

Urbanation Inc. reported that new condo sales in the GTA fell 68 per cent in the second half of 2022 on an annual basis, shifting just 5,419 units (an almost 20-year low).Fred Lum/the Globe and Mail

In 2006, the CMHC recorded 212,753 condominium apartments in the Greater Toronto Area, about 42,536 (20 per cent) of which were rented. By 2022, the volume had more than doubled to 473,385 condo apartments, and the number of them rented out had more than tripled with 171,242 (36 per cent) condo apartments leased.

In other words, if rented condos in the GTA were their own city they’d have the same number of households as the province’s fastest-growing city, Brampton, Ont.

By contrast, the purpose-built rental market has been stalled, growing just 4 per cent (with most of that growth coming in recent years) from 306,544 apartments in 2006 to 327,263 in 2022.

But even the boom in condo apartments hasn’t been enough to keep up with population growth: between 2006 and 2021 the region’s population surged 21.5 per cent from 5.1 million to 6.2 million people according to Statistics Canada’s record of the Toronto Census Metropolitan Area. In the same period, the number of private dwellings occupied in the CMA rose only 19.4 per cent from 1.894-million to 2.262-million.

Even as condos became a vital source of new housing, their affordability has spiralled out of reach to many, particularly in core Toronto neighbourhoods.

In 2016, the average preconstruction condo price in the GTA was about $657 per square foot (psf) according to Urbanation. If you didn’t want to wait several years for your condo to be built you could buy an existing condo that was trading in the resale market for a very comparable $638 psf, or a 3-per-cent discount.

By 2022 the average price of a new condo had shot up to $1,427 psf (and much more expensive in some core Toronto locations), which was 40-per-cent more than it cost for a resale condos that were trading for about $1,020 psf.

That gap is significant, and Ms. Lierman said it is part of the reason the region has gone from a city of Toronto-dominated condo market to one where cheaper 905-region projects account for half the new starts.

“The line – somewhat anecdotally – is $1,200 per square foot,” she said. “We have had successful launches, but they’ve been outside the downtown core and they are priced in the sweet spot of $1,200 to $1,400.”

One way out of this pickle is incentives for buyers, such as making deposit terms more flexible or offering holidays on maintenance fees. Perhaps the most generous incentive seen so far has come from developer Camrost Felcorp for their Raglan House condominium in midtown Toronto. After close, Camrost is proposing to send a cheque worth $2,000 to $2,500 (depending on the unit size) for 24 months to help buyers top up rental income or cover extra mortgage fees.

The bottom line is if new condos for sale now are too expensive to pay off for investors looking to flip or rent apartments, buyers won’t put down their deposits, the projects may take longer or simply will not get built and in a few years more renters will be competing for fewer apartments.



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Luxe $9m South Yarra sanctuary for sale with six-car basement garage



The South Yarra property feels very secluded, every with its proximity to Chapel Street.

A winning collaboration by some of the best in the business has produced this luxurious modern sanctuary in a prized lifestyle location.

High-end builder Agushi teamed with celebrated Workroom architects and Nathan Burkett Landscape Architects on the private inner-city residence.

The four-bedroom, five-bathroom house at 12 Rockley Rd, South Yarra has hit the market with a $9m-$9.5m asking price.


Largely crafted from concrete – which even features on the sculptural curved staircase that links the home’s three levels – and marble, it delivers sophisticated interiors with carefully framed garden views.

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When at home, a mirrored lift, infinity pool with in-floor cleaning and a six-car basement garage provide the ultimate in convenience.

But it is the state-of-the-art automation that paves the way for a lock-up-and-leave lifestyle.

The technology has been a game-changer for vendor and interior designer Georgie Coombe-Tennant and her husband, Mark.

It has transformed the way they live, doing away with the need for front door keys and allowing them to turn on the oven remotely, let the postie in the gate while sitting on a ski lift or turn on the sprinkler from Europe.

A skylight runs from the outdoor entertainment area into the dining room.

Grey Damastas marble is paired with chocolate toned timber in the kitchen.

The curved concrete staircase is a standout feature of the home.

“We had always had old traditional homes and renovated them, and we just felt like it was time for something modern,” Mrs Coombe-Tennant said.

“We saw Bear (Agushi’s) work and my expression for his work is that everything is so resolved.

“He has not left a single detail out of it. If you think of something you would need in a home it’s there.”

She has delighted in decorating the home, which she said offers loads of space despite having a townhouse feel.

“I found the home is so easy decorate and furnish because you have got this beautiful blank canvas and you can put any amount of colour or neutrality into in,” she said.

As well as three living areas and four bedrooms, the two-year-old home has the luxury of two home offices with desks crafted of the same grey Damastas marble that features in the lavish kitchen and bathrooms.

There’s a sense of privacy once you’re inside the gate.

Enjoy pool views from the main living room.

Gather around the sunken seating area.

The main open-plan living zone screams entertainer thanks to a series of full height sliding doors linking it to a covered outdoor dining space with a built-in barbecue, a conversation pit and north-facing sun deck.

A second ground floor lounge room provides another breakout space, perfect for curling up beside the fire.

Despite its proximity to Chapel St and Toorak Village, Mrs Coombe-Tennant said the home felt secluded.

“I guess with South Yarra people are always worried about noise and things like that but it’s very, very quiet, it’s really secretive. No one knows it’s here,” she said.

“Once we are in that front door you don’t hear a single sound, but you have got everything on your doorstep.”

It’s wall to wall marble in this bathroom.

The garage can accommodate six cars.

Built-in desks feature in both home offices.

RT Edgar Toorak director Sarah Case added that it was rare to find homes of this calibre created specifically for a lock-up-and-leave lifestyle.

“This home has every luxury we’ve come to expect from Agushi, who’s renowned solid concrete construction, superior quality, generous spaces and meticulous attention to detail, while providing for a modern way of living with a lift to all levels, stunning pool and six-car garage,” Ms Case said.

“From the magnificent marble kitchen to the beautiful bedrooms and the poolside outdoor spaces, every aspect has been thoughtfully designed to meet the needs of even the most discerning buyer.”

Mr Agushi said he prided himself on building homes with “over specced” insulation, glazing, solar panels and smart home integration.

Expressions of interest close on June 15 at 5pm.

According the latest Proptrack Home Price Index, national home prices continued to stabilise in April after rising for the fourth consecutive month, rising 0.14 per cent.


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A grandmother's van life and where housing investors live: This week's top real estate stories – The Globe and Mail



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This week in real estate, the housing crisis pushes one grandmother to live in a van, and three reasons why mortgage refinances are

Here are The Globe and Mail’s top housing and real estate stories this week, with the lowest mortgage rates available in Canada today, commentary from our mortgage expert and one home worth a look.

The housing crisis chose van life for this 57-year-old grandmother

Terri Smith-Fraser, a nursing assistant, was renovicted from her Halifax apartment last spring when the cost of rent for her two-bedroom apartment more than doubled. Unwilling to be a burden on her adult daughters or find a roommate, she decided van life – usually associated with the young and adventurous – was her only viable option. Suddenly a bronze 1998 GMC Savana purchased in January, 2022, was home.

“I’m a grandma. I’m not a 20-year-old nomad snowboarder. I’m just your regular person who goes to work every day, and I live in a van,” Ms. Smith-Fraser told The Globe and Mail.


Three reasons why mortgage refinances are disappearing

Mortgage refinances have fallen off a cliff. They’re down by 32 per cent, according to the latest data from the Canada Mortgage and Housing Corporation (CMHC). People still need to refinance, but there are three reasons why they can’t, Robert McLister writes in his column:

  • Tumbling home values
  • Soaring rates
  • The stress test

And here’s what to do about it if you’re in this boat.

This week’s mortgage rates: Markets price in another dose of tough rate medicine

“Higher for longer” is again the buzzphrase in Canada’s rate market. So much for the mini-U.S. banking crisis, which drove rates lower for all of two months, McLister writes. Now we’re dealing with a U.S. debt ceiling mess and persistently disappointing inflation indicators, not the least of which is stubbornly low unemployment. Both those factors have been driving rates higher.

Four in five Ontario housing investors live in the province: Statscan

More than 80 per cent of individual home investors in Ontario live in the province, according to a new report from Statistics Canada. Just 3 per cent of individual home investors reside elsewhere in Canada and 16 per cent live outside of the country, reports Rachelle Younglai.

The story is the same in British Columbia, Manitoba, Nova Scotia and New Brunswick, which does not reflect the spike in investor buying that occurred during the COVID-19 real estate boom. The study provides a window into investor buying patterns, which have come under scrutiny as home prices and rents have soared across the country.

Home of the week: An urban manse on Toronto’s Humber River

  • Home of the Week, 3 Riverside Trail,

    1 of 15

3 Riverside Trail, Toronto

From the street the home is an imposing two-storey stone manse at the top of a circular driveway with bay windows flanking the formal entrance. The foyer is a festival of detailed millwork and wainscotting that continues into the central hall and then into the formal rooms flanking the entrance. All of the doorways and windows in this space have modest arches, which adds a bit of Hobbit-like character.

The second floor has more of the original woodwork and arched windows, and the landing at the top of the stairs is generous enough for another formal sitting area with ravine views, and a balcony.

What do you think is the asking price for this house?

a. $2.89-million

b. $3.59-million

c. $6.69-million

d. $7.59-million

a. The asking price is $7.59-million.

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LACKIE: Busy Spring in Toronto Real Estate – Toronto Sun



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This has been a busy, bustling spring for the Toronto real estate market.

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There are people who will say it’s all an illusion. A perfectly coordinated dance between snake oil selling realtors and their greedy clients, all unified in pumping a market currently back on its heels as means of personal enrichment.


How does that saying go — never let the truth get in the way of a good story?

They will say it makes no sense that the market should have any signs of life at all given the rollercoaster of the last 18 months (slash, the three years since COVID, if we’re being honest) and that with rates high and staying there, and prices still high and mostly staying there, we are looking at the furthest thing from a healthy marketplace.

And perhaps it’s all relative — things feel particularly energized because in comparison to last fall, we are actually seeing some action out there.

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Houses in dodgy pockets fetching upwards of 20 offers, buyers seemingly undeterred by the needles on the street just steps away from the front door.

Cute houses in great pockets drawing multiple offers and landing peak-of-2022 prices.

  1. For years we have been hearing all about how the new flex is owning an investment property or two.

    LACKIE: Gap between haves and have-nots widens as gov’t shrugs

  2. Converting a single-family home into a multiplex rental dwelling is one way to add gentle density to an established neighbourhood, as demonstrated by this project in Toronto by Eurodale Design + Build.

    LACKIE: Make way for multiplexes Toronto

  3. Real estate for-sale sign.

    LACKIE: Blame the sellers, not just their agents

Sellers who may have wondered if the time-was-now realizing they didn’t want to miss their moment.

There are many utterly baffled that the market has held. That prices have held. That the pain of 2022 didn’t reset the playing field.

They are adamant that any attempt to explain it by pointing to how grossly insufficient our inventory levels are is really just distortion and manipulation. The idea somehow being that people can be scammed into engaging and thus what we are really looking at is a mirage.

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They think our problems will be solved if buyers simply stay home. Refuse to show up to houses that are underlisted. Refuse to engage in multiple offers. Refuse to pay a dollar more than list price. Refuse to pay realtor fees. Refuse to participate.

Legislate agents into listing at market value. Legally obligate sellers to accept any offer that meets the price they chose to list at. Cap realtor fees. The list goes on.


We apologize, but this video has failed to load.

Absent from all of this is the reality very much apparent on the ground: for all of the noise and anger, Toronto has not enough houses and more than enough willing participants who are capable of driving a marketplace.

By this time next week, we will have stats to support that the spring market is very much here and with it I expect we will note a sharp increase in transactions and a notable bump to average sale prices.

Is it a seasonal blip that will fizzle out as temperatures rise? Entirely possible. But even just a return to some seasonal rhythms in our marketplace would be a welcome return to normalcy.


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