The Toronto & GTA real estate market has been quite interesting so far in 2022. After a hot start to the year, freehold homes have subsided in price. Some areas have fallen more than others, ranging from a small drop of 3% in prices for freehold detached in certain parts of western Toronto, to an alarming 10% in Peel. This is when we take a look at prices month over month from February to March. Nonetheless, whether it’s in western toronto, durham, northern markham or georgina, there is no doubt that at best freehold properties have stagnated and at worst, seen a more than minor correction in prices. Yet the story is not that simple! What about condos? Well funny you should ask, because not only have condos NOT experienced the same depression of prices, but on the contrary, they have actually excelled in prices. In downtown alone, condo prices were up 6% month over month from February 2022 to March 2022, going from $839,973.00 to $891,539.00. Why has this happened? One exercise that will help us answer that key question is looking at average condo prices by the number of bedrooms! Let’s take a look!

When we breakdown Downtown Toronto Condo Prices by bedroom number, we see that what has appreciated the most so far this year are 2 bedroom and 2+1 bedroom condo units, as designated by the green and orange. 2 Beds saw their biggest surge between January and February, going from $881,601 to $1,000,417. Whereas with 2+1 units, we saw the largest jump occurring from February to March – going from $1,126,645 to a whopping $1,408,047. Now, have 2+1 units appreciated $282,000? No it is not quite that simple. When we take a look at every single sale of 2+1 units that occurred in March 2022, we see that there were 4 sales above $2,000,000 and 1 sale above $7,000,000. This will obviously carry up the average, inflating month over month numbers. Nonetheless, accounting for these high end sales, it is very safe to say that 2+1 condo units saw great gains month over month, and thus far year to date. 

 

In opposition to the 2 bedroom units and 2+1 units, the smaller 1 bedroom and studio units have seen more modest gains. In comparison to their larger 2 bed and 2+1 counterparts, they have not enjoyed the same rapid and demonstrative growth in prices over the course of the first 3 months. So on one hand, we have 2 and 2+1 units, which are larger in nature, performing exceptionally in downtown toronto. On the other hand, we see that studio and 1 bedroom units, which are smaller in nature, experience healthy yet lower gains. The fair inference here is that larger condos have performed better, and as a result, larger condos are one of the main reasons that condo prices have sustained and improved while freehold prices have diminished. This strongly indicates that some freehold buyers have shifted towards the condo market, pursuing larger condos as substitutes for older 1 and a half storeys or bungalows.