Simcoe County has topped the list as being one of the hottest markets in condominium sales, according to a new study conducted by Zoocasa.
While it’s no secret that prices for single-family homes have soared over the last 18 months around the region, what may come as news to many is that the local condo market is getting to be just as hot.
“We know that detached houses have been really hot over the last year and a half and is what has been driving buyer demand over the pandemic. The condo segment in general was lagging behind that up until the beginning of this year and then it started to pick up speed again,” Penelope Graham, managing editor and senior communications manager for Zoocasa, told BarrieToday.
Graham noted the most recent numbers from May 2021 show the sales increase for condos was up 170 per cent year over year, which she noted has actually outpaced houses.
“We decided to do this study to see just how condo price growth has performed across the GTA, including Simcoe (County), over the course of the pandemic (and) to see where affordability has landed in comparison to the rest of the market," she said. "What we have seen throughout the pandemic is buyers are going to markets that generally weren’t hot spots before the pandemic."
The study included Simcoe County, York Region, Durham Region, City of Toronto, Peel Region, Halton Region, and Dufferin County.
"Smaller cities, towns or even rural markets all saw an influx in demand and that’s been pushing prices up because supply in these places are typically less than big city centres,” Graham added. “We found it really interesting when we crunched the numbers that Simcoe was actually the hottest place for price increases in the condo segment.”
For the study, Zoocasa took a close look at prices from March and April 2020, Graham explained, which she said they consider to be the depth of the pandemic sales slump.
“That’s when lockdowns were coming into effect and people didn’t have a lot of information. There was a lot of fear and people were putting their home-buying aspirations on hold," she said.
Compare that to May 2021, condo prices in the region were up 56 per cent year over year, an increase she said is “quite significant." To put that in perspective, Graham noted condo prices in the City of Toronto only increased 17 per cent over the same time period last year.
Simcoe County topping the list was surprising to Graham, as it’s not a market that is known for its condo stock. A few important things to keep in mind, she added, is the condo market in the region is actually quite small, noting there are only a few areas that offer this type of housing option — including New Tecumseth and Innisfil — and that means there's ultimately a lack of supply in the condominium market locally.
“All of the numbers are clustered around (southern Simcoe County) and there were only 10 purchases total made in May," Graham said.
Graham acknowledged that is a fairly small sample size, something that can often result in more volatile price increases and could contribute to the reason the condo market is so hot in the region in comparison to other areas.
In terms of affordability, the region ranks fourth in terms of the most expensive, which Graham says is significant.
“We have seen a steep jump from where unit prices were previously. We think it continues to reflect that home buyers are trying to seek out the most affordable entry points into the market right now. Home prices overall have increased so steeply across all home types over the last year and a half," she said.
As many buyers still have the option of working from home and picking the market that best suits their affordability needs, Graham believes they will continue to seek out options in markets that they traditionally would not have considered before.
“That’s really reflective of the times and people seeking out these smaller secondary markets where traditionally condo purchasing would be focused around the larger city centres," she said.
Another reason behind the survey was they wanted to get a glimpse at how affordable has changed for condominiums over the course of the pandemic. While Graham believes condos still offer a more affordable option for someone looking to enter the housing market, the challenge in Simcoe County will be supply.
“Compared to the City of Toronto, the new listings are just much smaller. That is going to be putting upwards pressure on prices and that’s likely going to be a large contributor as to why we saw such a large jump in Simcoe County,” she said. “Comparably, though, it is still a more accessible entry point. The detached house market in (the region) is quite expensive.
"Obviously, compared to how affordability was a year ago, there are going to be some buyers who are now going to find themselves priced out… and that’s one of the things we wanted to highlight with the study is how affordability has changed.”
