Although condo prices have been holding steady in Toronto recently, new insights show that the three-bedroom segment has been rocketing up in price thanks to returning city buyers and a red-hot single-family market.
Over the past 60 days, Toronto’s average price per square foot (PSF) for a condo has remained at $884, according to new market data released by Strata.ca last week. However, the city’s three-bedroom category has seen few signs of slowing down, with the average PSF climbing 6.7 percent from $576 in March to $615 in June.
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The condo brokerage provided Livabl with finalized numbers from their report, showing that the sold price of these sought-after suites averaged $900,310 in June. In March, the average price of a three-bedroom condo in Toronto equalled $705,140, which is a roughly $200,000 increase over a period of four months.
Francisco Hiebert, a real estate agent with Strata.ca, explains that many people who temporarily left Toronto during the COVID-19 pandemic are now making a return. As COVID cases decline and reopening plans progress, he anticipates that the demand for three-bedroom units will only continue to rise in the coming months.
“Many workplaces will be doing a hybrid of remote work, plus a few days in the office,” said Hiebert in the report. “So now that people know what their jobs will look like post-pandemic, a lot of them are returning to the city to avoid long commutes.”
The scorching competition for three-bedroom condos has also been traced outside of the City of Toronto. In the Greater Toronto Area, Strata.ca has found that the average sold price of a three-bedroom unit currently sits at $775,500, an 11 percent increase from March when the average price totaled $695,600.
The high cost of a single-family home has been driving demand for three-bedroom units, according to Strata.ca realtor Sam Massoudi. Left with few options, Massoudi explains that buyers have had no choice but to consider a three-bedroom condo as an alternative.
“Since freeholds remain at the heart of a very competitive market, a lot of people who need the three bedrooms are priced out,” he said.
“All that space can be used for a family with two children…or a family with one child, plus a home office. Aside from freehold houses, this really is the next best thing,” Massoudi added.
In March, buyers of three-bedroom units in Toronto typically paid 8.4 percent over the asking price, Strata.ca says. The sale-to-list price ratio fell by 4.5 percent in May, but is now holding steady at 4.4 percent. Competition for three-bedroom units is likely to heat up further as inventory levels continue to decline since peaking in April.
“When it comes to these rare three-bedroom units, renters also want in,” said Strata.ca agent Osman Omaid in the report. “With universities and colleges potentially gearing up for in-person learning, there are tons of students competing for these larger units, too.”