Toronto’s downtown condo market had its fair share of challenges in 2020 as values dropped and buyers sought out more spacious abodes in suburban neighbourhoods. Since late 2020 and throughout 2021, the condo market has made significant progress from its early pandemic-lows, but not all neighbourhoods are seeing equal recovery results.
New insights released by Strata.ca this week show that prices for downtown condos are increasing, but not in some of Toronto’s trendier areas. Last month, the average cost per square foot (PSF) of a downtown condo reached $1,088, an increase of $88 from January’s low and a step up from numbers recorded in May and June.
When comparing downtown communities, some areas are reporting PSF declines while others are seeing their values rise. The Bay Street Corridor, for instance, is a popular area among local university students and is regarded as Canada’s finance hub. In July, the PSF for units in The Corridor rose to $1,200 PSF, with an average condo price of approximately $780,000, before it quickly climbed in the first weeks of August to $893,000 — a $113,000 increase.
Robert Van Rhijn, Broker of Record at Strata.ca, explained that students from wealthier families who tend to buy instead of rent could be contributing to local bidding wars and the rise in prices. The gradual return to downtown offices could also be a factor in the recent price acceleration.
“A lot of young professionals are heading back to the office a few days per week, so it’s understandable that demand is up,” said Francisco Hiebert, a real estate agent at Strata.ca, in the report.
In other parts of the city, particularly those known for their nightlife, restaurants and bars, condo price increases haven’t been quite as pronounced.
Average condo prices in King West, The Village, Queen West and the Distillery District — neighbourhoods that were considered to be popular among party-goers — saw prices drop during July. Van Rhijn explained in the report that the King and Queen West neighbourhoods are still sitting at March levels, while prices in The Village are at their lowest since January. These areas surround Toronto’s downtown area, leading Strata.ca to suggest that rising prices are focused in the city’s central core.
“When we looked at all the data on a map, the neighbourhoods with an uptick in sales activity had a higher concentration of workspaces,” said Van Rhijn. “The writing’s on the wall as people face the reality that they’ll eventually have to return to the office.”
Hiebert noted that it may be too early to confirm why there is price disparity between downtown neighbourhoods.
“Rental demand is still strong in areas known for their entertainment value, but buyers don’t seem to be flocking here as much,” he said.
