According to data from prop-tech firm Wahi, of 31 regions in the GTA from Oakville to Oshawa, the five most affordable areas to buy a condo are Oshawa, the former City of York in Toronto, Clarington in Durham Region, Scarborough, and Brampton. At an average of 1,145 sq. ft, the average sales price of a resale condo in Oshawa was $505,000 in February, or $631 per sq. ft. In the former City of York, the average sales price was $563,000 on a 767 sq. ft unit or $842 per sq. ft.
However, according to Wahi’s online tool called Market Pulse, buyer activity is most frenetic in the GTA’s northeast around Markham, where condo prices are lowest. Benjy Katchen, CEO of Wahi, says overbidding is commonplace in these areas because savvy sellers are pricing their units below market value, sparking bidding wars.
“This goes into the affordability theme. If it’s cheaper, that’s where there’s more activity,” Katchen said.
Such activity could be interpreted as a market coming back to life, but Katchen advises there’s still a way to go. “I think we’re still in the middle innings of the price adjustment,” he said. “I won’t say this is the best year for real estate transactions but it’s a sign people are transacting. Sellers have to price their home at what buyers are willing to pay.”
Katchen estimates prices in the GTA are still 10 to 20 percent below their peaks, and that most activity is in the $600,000 to $1 million range. That assessment comes with the news earlier this week that the Bank of Canada held the prime interest rate at 4.5 percent marking the second consecutive hold since rates began rising in March 2022. The hold should come as a relief to homeowners with variable rates and may instill more confidence in both buyers and sellers in the housing market that has been sluggish so far this spring.
“Hopefully this sends a strong signal to buyers and sellers that rates have hit their peak and rate decreases could happen before the end of the year,” says Ratesdot.ca mortgage and real estate expert Victor Tran. “This could build confidence in the market and potentially prompt more sales.”
He added that historical patterns should hold this year and that market activity will heat up this spring. Developers, for their part, are very cognizant that affordability has become a necessity, rather than a luxury, for GTA buyers. Brixen Developments has focused their building in the growing peripheries of Toronto where land costs are lower, and therefore, easier for buyers to absorb when projects go to sale.
Brixen Developments is building Exhale Residences in Mississauga’s Lakeview neighbourhood — an 11-storey, 284-unit, mid-rise condominium that Brixen’s co-founder and principal, Alexander D’Orazio, says will appeal to end users because of the affordability factor. In a community with homes priced north of $1 million, D’Orazio says Exhale Residences will offer first-time buyers an opportunity to remain in the neighbourhood they might have grown up in or wish to move into.
“We feel like there’s a lot of growth in these neighbouring communities but the land cost offers a lot more value, and there are more opportunities to get some more density, which ultimately reduces your land cost,” D’Orazio said.
“We bought at a pretty good price, but we found efficiencies in the actual development itself that further reduced the land cost so we could offer more affordable units to purchasers in the market.”
Further afield in St. Catharines, Sphere Developments is getting ready to launch sales for Lot 16, a stacked townhouse project consisting of 104 units. According to Rohan Gawri, Sphere Developments’ president, about 90 percent of units are priced below $699,000 thanks to more efficient designs meaning less space is used for corridors or lobbies. As a result of Lot 16’s price points, Gawri anticipates seeing many first-time homebuyers at its launch.