Price Gap Between Toronto Houses and Condos Expected to Shrink

As single-family homes skyrocketed, the condo market flatlined and the price gap between condos and houses jumped 50 per cent last year in the Greater Toronto region.

However, industry analysts anticipate that divide to start shrinking over the next few years as local municipalities green-light several long-awaited low-rise housing projects and the condo market cools off from years of record-breaking construction.

Last year, the super hot market for single-family home construction increased prices by 18 per cent to an average of $829,766. According to an analysis by commercial real estate firm Altus Group, new single-family home sales in the GTA jumped 8 per cent last year to over 19,600 while condo sales fell 2 per cent to approximately 21,600.

By the end of December in 2015, there were less than 5,000 homes for sale on the low-rise market in the Greater Toronto area, representing a historic low. The condo prices were at an average of $453,083. The changing pattern helped to drive a $376,000 difference between the prices for new condos and houses.

This scenario could start to change over the next several years as condominium construction slows down, the high-rise market in downtown Toronto shifts in favour of rental apartments and developers turn their eyes back to the lucrative market for detached houses and town homes.

“Certainly over the last three or four years we’ve swung the ship too far away from single-family,” said Peter Norman, vice-president and chief economist at Altus. Peter Norman forecasts the number of new detached homes for sale in the GTA to increase 30 per cent next year to 13,000.

Reference: The Globe and Mail

http://www.theglobeandmail.com/…/price-gap…/article28443336/