The Toronto Regional Real Estate Board (TRREB) says condo sales fell almost 20 per cent in Q2 on a year-over-year basis from 2023, as new listings for condos and rentals shot up and rental prices dipped slightly.

In Q2, condo sales fell from 6,824 in 2023 to 5,474 in 2024, a 19.8 per cent decline. New listings for the housing went up 36.5 per cent year-over-year to 16,917. The average selling price of a condo fell by 1.2 per cent to $729,005.

On the rental side, the average rent from bachelor to three-bedroom units was $2,753, a 2.5 per cent decrease from the year prior.

The number of leased apartment rentals went up 25.2 per cent to 17,400 in Q2 2024, and listed apartment rentals leapt up 51.3 per cent to 30,097.

“The condo market is very sensitive to interest rates, given that this segment is a traditional entry point into homeownership. With monthly payments remaining high and average rents edging lower over the past year, many would-be buyers remain on the sidelines,” TRREB president Jennifer Pearce said in one of two reports on the condo and rental markets.

She expects improved affordability next year, which should raise the number of first-time buyers in the condo market.

Rental listings and leases leap up, rents fall

One-bedroom rentals made up the majority of listings in Q2 at 16,369 units, followed by two bedroom (11,053), bachelor (1,415) and three bedroom (1,260). The highest percentage growth was in bachelor units at 70.5 per cent.

“Record population growth kept the demand for condo rental apartments high in the second quarter,” Pearce said. “The affordability challenges associated with high mortgage payments for ownership housing also continued to be a driver of rental demand, especially given that we have seen some relief in rents over the past year.”

The average rent for all properties went down, with the largest percentage decrease in three-bedroom units at 6.9 per cent to $3,977. The rent for a one-bedroom condo in Q2 was $2,452, a 3.1 per cent decrease from $2,529 in Q2 2023. Average two-bedroom condo rent went down 1.9 per cent in the same period to $3,178.

National average rents were found to have fallen 0.8 per cent from May to June in Rentals.ca and Urbanation’s June rent report.

TRREB said renters gained more choice and could negotiate lower average rents compared to Q2 2023 because of the increase in rental supply year-over-year and rising rental listings.

Rental demand will remain “very strong for the foreseeable future,” Jason Mercer, TRREB’s chief market analyst, said. While inventory over the past year has increased and resulted in slightly more affordable rental housing, the relief could be short-lived if a stream of new rental units do not come enter the market, he continued.

Condo asking prices stay ‘relatively flat’

One-bedroom condo units made up most for-sale listings at 9,697. Two-bedroom units were next at 6,224, then bachelor (762) and three bedroom (717). The highest percentage growth was in three-bedroom units at 56.9 per cent.

The median price for a condo in the regions TRREB covers was $640,000 in Q2. The price of an average condo in the City of Toronto was $765,963, followed by York Region ($709,117), Halton Region ($667,549), Peel Region ($618,641) and Durham Region ($559,441).

Toronto Central commanded the highest average condo price at $824,614. Toronto West was next at $675,146, then Toronto East at $631,313.

The plurality of sales in Q2 was two-bedroom units at 33 per cent, with one bedroom plus den at 24 per cent, one bedroom at 19 per cent, two bedroom plus den at 15 per cent, three bedroom units at seven per cent and bachelor at two per cent.

“Despite a much better-supplied condo market over the past year, selling prices have remained relatively flat, especially in Toronto. This suggests that sellers are holding relatively firm on their listing prices,” Mercer said. “This may be in anticipation of improved market conditions as borrowing costs continue to trend lower this year and next.”

The Bank of Canada cut the overnight interest rate to 4.5 per cent last week because of improved economics and successful efforts to tame inflation.

TRREB’s findings are similar to those from Urbanation, which found a 66 per cent year-over-year decline in new condo sales in the Greater Toronto Hamilton Area in Q2. Asking prices for unsold units fell 2.6 per cent year-over-year to an average of $1,361 per square foot, it reported.

“This demonstrates how sticky new condominium prices have become due to high development and financing costs, and record prices paid for land at the market peak,” Urbanation wrote in a release.