The Canadian real estate landscape, particularly the condo market, has undergone significant shifts since the peak buying frenzy of the pandemic in 2022. During that period, major Canadian cities saw a surge in condo purchases as buyers rushed to secure properties in a highly competitive seller’s market. However, the situation has now dramatically reversed, leading to a more complex and nuanced market. Erica Reddy, a seasoned real estate agent and market analyst based in Toronto, recently shared her expert insights with CTV News on whether now is the right time to buy or rent a condo.
The State of Canada’s Condo Market
According to Reddy, the condo market in the Greater Toronto Area (GTA) has cooled significantly, with new listings soaring by 36.5% in the second quarter of 2024 compared to the previous year. Meanwhile, sales have dropped by nearly 20% over the same period, according to data from the Toronto Regional Real Estate Board. This shift has created what Reddy describes as a “massive skew” in supply and demand, particularly in the GTA, where investors are struggling to break even amid high interest rates and increasing inventory.
“You’re seeing investors really aren’t investing in the marketplace right now because it’s prohibitive for them to,” Reddy explains, noting that the current economic climate has led to greater inventory and lower prices. This has caused a unique scenario where the market is more favorable to buyers, a stark contrast to the frenzied environment of a few years ago when demand outpaced supply and prices were skyrocketing.
Regional Variations Across Canada
While the GTA has seen a notable drop in condo prices, the situation varies across other regions in Canada. In Quebec, for instance, median condo prices rose by 7% in July compared to the same period last year. In Vancouver, the benchmark price for apartments saw a slight decline of 0.3% year-over-year, reflecting a more stable market. On the other hand, Edmonton experienced a 4.9% increase in average apartment prices in July, while Calgary saw a significant 17% year-over-year rise in benchmark prices.
The prairie provinces have had a mixed experience. Saskatchewan’s median price for apartment units remained relatively unchanged, with only a modest 0.8% increase year-over-year in the second quarter of 2024. Winnipeg and its surrounding markets have seen a stronger uptick, with average condo prices rising by 9% over June of the previous year.
These regional differences highlight the importance of local market conditions when making real estate decisions, as what may be true for one city or province could differ greatly from another.
Should You Buy or Rent Right Now?
Given the current market dynamics, many prospective buyers are grappling with the decision of whether to buy or rent. Reddy emphasizes that the increased supply and cooling demand in some markets present a potential opportunity for buyers to enter the market at a favorable time. “If you’re looking at real estate from a long-term time horizon, it’s a phenomenal investment,” Reddy advises. The lower prices and increased inventory offer buyers more options and the luxury of time to make informed decisions, unlike during the peak of the pandemic when properties were being snapped up at record speeds.
For those who are still uncertain about buying a condo, Reddy suggests that renting remains a viable option. Renting provides flexibility and the opportunity to wait for the market to stabilize further, ensuring that buyers enter the market when they feel most comfortable. “Now it’s a much more manageable market,” Reddy notes, highlighting that the current conditions allow for careful consideration without the pressure of rapid price increases and limited inventory that characterized previous years.
A Balanced Perspective on Timing
Ultimately, Reddy’s insights reflect a balanced perspective on the buy-versus-rent dilemma in today’s condo market. While the current market conditions may favor buyers, the decision to purchase should be based on individual circumstances, including long-term goals, financial readiness, and the specific dynamics of the local market. For those ready to invest in real estate with a long-term view, now could be an opportune time to take advantage of the buyer’s market. However, for others who prefer flexibility or are waiting for further market clarity, renting remains a sound strategy.
As the Canadian real estate market continues to evolve, prospective buyers and renters alike would do well to stay informed and consider expert advice, such as Reddy’s, to navigate these changing conditions effectively. Whether buying or renting, the key is to align real estate decisions with personal circumstances and long-term objectives to ensure the best possible outcome in a fluctuating market.
