Following the frenzied conditions of 2021, real estate in the GTA inched back down to earth in 2022, as the high-interest-rate environment took some of the steam out of the market.

While the popularity of single-family homes dropped substantially, the condo market emerged relatively strong. The latest available data from the Building Industry and Land Development Association (BILD) put new home sales at 1,330 units in November, with almost 80% of those being sales of new condominium apartments, at 1,053 units sold.

But the condo market’s strength during these inflated times comes as no surprise, explained Shaun Hildebrand, President of real estate consulting firm Urbanation, in a previous interview with STOREYS.

“Typically, when ownership affordability erodes this much — this is happening obviously as a result of the big jump in interest rates — an increasing proportion of housing sales tends to go into the condo segment. And that’s something that we’ve been seeing in recent months,” he said.

As such, condo apartments were the only housing type to report a year-over-year gain in December, according to the latest data from the Toronto Regional Real Estate Board (TRREB).

This is a reflection of the strong fundamentals that drive the strength of the condo market in the GTA. Low supply serves to bolster prices and appreciate condo values, even in times of market duress. A recent report from Bullpen Research & Consulting put annual condo price growth in the GTA at 10-15% over the past 18 months, with condo sales in the realm of 20-22K over the past five years.

Moreover, in the years to come, Toronto will see no shortage of infrastructural growth, including the forthcoming Ontario Line and Eglinton Crosstown LRT, which will keep property values strong.

Moving forward into 2023, the federal government’s latest immigration targets — calling for 465,000 new permanent residents in 2023, 485,000 in 2024, and 500,000 in 2025 — will be “highly supportive” of condo demand, forecasted Hildebrand. This is well-supported by historical trends. Of any other Canadian city, Toronto tends to welcome the highest number of recent immigrants (nearly 30% in 2021, according to Statistics Canada’s most recent census) and this has been the case over the past 50 years.

For investors with rental aspirations, condos are especially attractive in terms of return on investment. In fact, condo rents are appreciating more on a year-over-year basis than any other rental type, according to Rentals.ca’s latest national rent report.

“I think the condo market will probably do fairly well,” continued Hildebrand. “There are lots of buyers waiting for the right time to jump in the market. And I think that, at the first signs of stabilization in the economy and the broader market, we’ll see quite a few buyers begin to get back into the marketplace.”

To meet the onslaught of demand, the GTA is expected to see a record level of condo completions in the coming year, including some high-profile projects that are already showing strong pre-sale activity.

8 Elm, a 69-storey mixed-use tower at Yonge and Dundas that’s a collaboration between Capital Developments, Reserve Properties, and Canadian actor Simu Liu, is one of them. Just over a month after launching, more than 500 of the 630 suites released to market have sold.

The Frank Gehry-designed Forma project at 266-284 King Street West, being co-developed by Dream Unlimited, Great Gulf, and Westdale Properties, has been met with similar enthusiasm. After launching in June, well over 50% of suites in the 73-storey east tower sold firm over a six-week period. As of November, the project reached close to $700M in sales.

The success of 8 Elm and Forma is a marker of the extraordinarily high demand for condo properties, particularly in centrally-located, transit-supported areas of the city.

While the condo market in the GTA won’t be without headwinds, including persisting supply chain issues and inflated construction costs, the segment’s strong fundamentals speak for themselves, making a compelling case for condos in the year ahead — and for years to come.