{"id":58811,"date":"2025-01-31T00:22:07","date_gmt":"2025-01-31T00:22:07","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/real-estate\/how-did-the-gta-condo-market-finish-2024\/"},"modified":"2025-01-31T00:22:07","modified_gmt":"2025-01-31T00:22:07","slug":"how-did-the-gta-condo-market-finish-2024","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=58811","title":{"rendered":"How Did The GTA Condo Market Finish 2024?"},"content":{"rendered":"


\n<\/p>\n

\n

Two\u00a0<\/em>stats posts in the same week?<\/p>\n

Egad!<\/p>\n

Not only that, the January TRREB stats will likely be released on Monday or Tuesday, which means yet\u00a0another<\/em> stats post toward the end of next week too.<\/p>\n

I guess we need Monday\u2019s post to be something fun and light, just to create the balance?<\/p>\n

\u201cFun and light.\u201d\u00a0 Huh.\u00a0 Not exactly words to describe last year\u2019s condominium market, are they?<\/p>\n

It\u2019s hard to believe that only two years ago, we were in a condominium market that was routinely seeing, five, ten, or fifteen offers on run-of-the-mill condos.<\/p>\n

I remember one particular condo that I listed for sale on Richmond Street East that was, if I\u2019m being honest, not exactly a jaw-dropper.\u00a0 But what\u00a0was<\/em> jaw-dropping was the final tally of showings on the unit, which eventually topped\u00a0100<\/em>.<\/p>\n

I think that was the most showings I had ever witnessed on one of my listings before, and while you might think that the \u201cmost ever\u201d tag would be applied to an entry-level freehold property, in the end, the record was set by a condo on a busy corner, one city block from a very undesirable section of the city.<\/p>\n

But that was then and this is now.<\/p>\n

Er,\u00a0now<\/em>, for today\u2019s discussion purposes, is 2024, since I want to look back and see how the condominium market finished 2024.<\/p>\n

Necessary disclaimer, first and foremost:<\/p>\n

We are talking about the\u00a0resale<\/em> condominium market.\u00a0 This is not about the\u00a0pre-construction<\/em> condo market.<\/strong><\/p>\n

As the regular readers know, I have never sold a pre-construction condo in twenty years.\u00a0 Not one.<\/p>\n

I have been writing about the perils of pre-construction condominiums here in TRB since the inception of the site in 2007.<\/p>\n

Last year was\u00a0not<\/em> a good year for pre-construction condo sales, and for good reason.<\/p>\n

It\u2019s hard to convince people \u2013 even the most clueless, naive, optimistic, to pay 50% more than fair market value for something that\u2019s not yet built, has no guarantee of being built, and falls within a volatile sector.<\/p>\n

Real estate think-tank,\u00a0Urbanation<\/em>, gave us some spectacular headlines about pre-construction condo sales in 2024:<\/p>\n

February 1st: GTA New Condo Sales Fell To 15-Year Low In 2023<\/a><\/p>\n

April 22nd: GTHA New Condo Sales Fall 71% Below 10-Year Average<\/a><\/p>\n

July 18th: Slowest First Half For GTHA New Condo Sales In 27 Years<\/a><\/p>\n

October 18: GTHA New Condo Sales Fall To Nearly 30-Year Low In Q3-24<\/a><\/p>\n

So again, it needs to be said: there is a difference between the resale condominium market and the pre-construction condominium market, and in 2024, so many of the major media outlets failed to distinguish between the two.<\/p>\n

With that out of the way, let\u2019s first talk about the \u201cdays on market\u201d statistic as we finished 2024.<\/p>\n

Through Q3 of 2024, we had seen\u00a0listing\u00a0<\/em>days on market at a 4-year high in every single month:<\/p>\n

\"\"<\/p>\n

As you can see, the spike from October of 2023 meant that\u00a0one<\/em> month of 2024 did not set the 4-year high, but overall, I think we can come to a basic conclusion:<\/p>\n

\n

Properties took\u00a0much<\/em> longer to sell in 2024 than they did in years prior.<\/p>\n<\/blockquote>\n

Property<\/em> days on market, or \u201cPDOM,\u201d which is the total number of days for a property including multiple listings looked very similar last year:<\/p>\n

\"\"<\/p>\n

Here we do not <\/em>see a single-month outlier, as we did in October for LDOM.<\/p>\n

Just a straight blue line\u00a0above<\/em> every other line on the chart.\u00a0\u00a0That<\/em> is clear indication of just how long properties took to sell in 2024.<\/p>\n

And with PDOM, the contrast is even more stark, since an average of the twelve calendar months for 2021 through 2024 shows as follows:<\/p>\n

2024: 39.8 days
2023: 30.5 days
2022: 25.0 days
2021: 18.8 days<\/p>\n

If we compare the DOM for\u00a0condos<\/em> versus the overall GTA market, we can see that the gap widened in Q4 before narrowing again to finish the year:<\/p>\n

\"\"<\/p>\n

When we start to look at the number of condominium units sold, it\u2019s important to recall the trend from Q3:\u00a0sales were declining year-over-year.<\/em><\/p>\n

After seeing 416 condo sales\u00a0increase<\/em> on a year-over-year basis in January and February, sales\u00a0decreased<\/em> in March, April, May, June, July, and August.<\/p>\n

Sales\u00a0moderately\u00a0<\/em>increased in September, but that changed significantly in Q4:<\/p>\n

\"\"<\/p>\n

October sales were up 31.6% over 2023, and November sales were up 36.6%.<\/p>\n

Sales dipped in December, down 5.5%, but the overall volume in Q4 showed year-over-year strength.<\/p>\n

2024 finished with\u00a0fewer<\/em> sales than 2023; a decline of 3.7%.<\/p>\n

But after seeing 2024 sales essentially trace the bottom of the chart below, sales went \u201cmid-pack\u201d in Q4:<\/p>\n

\"\"<\/p>\n

The 905 followed a very similar path to the 416:<\/p>\n

\"\"<\/p>\n

October sales were up 35.6%, year-over-year, and November sales were up 32.6%.<\/p>\n

But in December, while 416 sales\u00a0declined<\/em>, 905 sales increased by 16.8%.<\/p>\n

While sales in the 905\u00a0did<\/em> decline on a year-over-year basis, they were only down by 0.1% from 2023.<\/p>\n

Looking at the figures on a chart, I think we start to ee that if 2021 was removed, for some reason, the other years would blend together quite seamlessly:<\/p>\n

\"\"<\/p>\n

Well, except perhaps for the first three months of 2022.<\/p>\n

But overall, June through December, 2018, 2019, 2021, 2023, and 2024 look quite similar.<\/p>\n

When it comes to\u00a0inventory<\/em>, despite all the talk of a massive glut of listings in Q4, the condominium inventory fell more in line than it had in the previous two quarters:<\/p>\n

\"\"<\/p>\n

Inventory in Q4 traced 2023 pretty closely as you can see, and both years were well ahead of 2018, 2019, 2021, and 2022.<\/p>\n

In the 905, the chart looks completely different.<\/p>\n

New listings were simply through the roof.\u00a0 There\u2019s no other way to describe this:<\/p>\n

\"\"<\/p>\n

The crazy thing is: you would\u00a0think<\/em> the absorption rate skyrockets as a result, but as you\u2019ll see shortly, it doesn\u2019t.<\/p>\n

So how are all these listings being absorbed by the market?<\/p>\n

The \u201cabsorption rate\u201d in Q4 was still\u00a0well\u00a0<\/em>below the 50% threshold which signals, at least in theory, the difference between a buyer\u2019s market and a seller\u2019s market.<\/p>\n

However, after a near-record low rate of 23.3% in September, the absorption rate increased significantly:<\/p>\n

\"\"<\/p>\n

Don\u2019t let that 53.6% absorption rate from December fool you into thinking that it was a\u00a0seller\u2019s<\/em> market, because it wasn\u2019t.<\/p>\n

In fact, it wasn\u2019t a seller\u2019s market at any point in 2024.\u00a0 Not a single month, week, or day.<\/p>\n

Q4\u2019s absorption rate\u00a0was<\/em> better in 2024 than in 2023, however:<\/p>\n

\"\"<\/p>\n

But as I said: 2024 was a buyer\u2019s market, hands down.<\/p>\n

In the 905, the absorption rate was\u00a0lower<\/em> than the 416 in both October and November, but surprisingly it was\u00a0higher<\/em> in December:<\/p>\n

\"\"<\/p>\n

The\u00a0yearly\u00a0<\/em>absorption rate of 37.5% pales in comparison to previous years but is higher than the 34.2% recorded in the 416.<\/p>\n

The 905 chart doesn\u2019t look quite as dire as that of the 416:<\/p>\n

\"\"<\/p>\n

But wow, 37.5% and 34.2%.<\/p>\n

Those numbers are mind-blowing!<\/p>\n

Just think about this: the\u00a0average<\/em> absorption rate in 2022 was 78.9% in the 905.<\/p>\n

That\u2019s more than double<\/em> what we experienced in 2024.<\/p>\n

Alright, so what\u2019s in store for 2025?<\/p>\n

Things can only get\u2026\u2026\u2026.better<\/em> from here, right?<\/p>\n

Let me pass the mic\u2026<\/p>\n