‘Far too much condo product’ in Toronto and Vancouver, Robertson tells Toronto Star
Federal minister of housing and infrastructure Gregor Robertson delivered a stark assessment of Toronto’s real estate sector Tuesday, warning Toronto’s condominium market “is now in free fall.”
“There’s far too much condo product in both Toronto and Vancouver,” Robertson said in an interview with the Toronto Star following a tour of Oak House, a University of Toronto residence. “That type of housing was overbuilt in recent years, and it’s not selling in today’s market.”
Robertson, a former Vancouver mayor who assumed the housing portfolio this year, attributed the downturn to a long-anticipated correction. “So there’s a market correction, that many predicted years ago, that we were in a housing bubble,” he said.
The slump in Toronto’s condo market has been one of the biggest stories of the past year in the Canadian real estate and mortgage spaces, with a glut of new supply hitting the market even as demand plunges and prices slide.
Joel Fox, co-founder and chief operating officer at real estate closing platform Ownright, told Canadian Mortgage Professional in a recent interview that the market didn’t appear to be turning a corner, either.
“The price drops aren’t enough,” he said. “Even if we saw interest rates come more in line with what we expected them to get to this year, it still wouldn’t be enough.
“We were bound to hit this point where the prices were increasing so much and incomes just weren’t lining up with where the prices were. So I really think we’re going to see prices go down further and further until we hit that equilibrium where it starts to make sense for people to take the plunge.”
Despite calls from developers, Robertson ruled out immediate relief in his interview with the Star. He rejected repealing the foreign buyer ban or offering tax breaks for new builds. Reversing the foreign buyer ban is “not on my immediate radar,” he said.
GTA real estate market in decline
Market data underscores his “free fall” warning. July sales in the Greater Toronto Area totaled 359 units, down 48% from last year and 82% below the 10-year average, according to Altus Group.
“The protracted nature of this market has now surpassed the severe downturn in new home sales during the early 1990s,” said Edward Jegg, research manager at Altus.
What are your thoughts on the current state of real estate in the GTA? Share your insights in the comments below.
