With a glut of condo inventory on the market and prices expected to drop further, Toronto’s condominium segment is seeing very little movement. But although demand is low for the investor-favoured studio and one-bedroom units, are the larger, family-oriented two- and three-bedrooms bucking the trend?
“It depends on what you mean by larger units — in 2004, that meant 1,500 to 2,500 square feet,” said David Fleming, broker of record of Bosley – Toronto Realty Group. “Now I have a three-bedroom coming to market, and it’s 875 square feet.”
Fleming noted that this change in layouts, driven by developers who aren’t building for users, but investors, is likely part of the reason why two- and three-bedrooms aren’t selling at a much higher rate than smaller units.
That might partially explain why recent condo market data shows little to no change in sales year-over-year for two- and three-bedroom units. The Q3 2024 Toronto Regional Real Estate Board report showed 337 two-bedroom and two-bedroom-plus-den units changed hands and 35 three-bedrooms, while a similar 328 units and 42 units, respectively, sold in Q3 2023.
“What’s moving are functional, livable units — that’s not a three-bedroom that’s 780 square feet in a building that’s registered with 40 other units for sale and 120 for lease, or one with a bad floor plan and micro appliances and no closets,” Fleming said.
He explained that while there are quality larger units, but they’re often in older buildings with higher fees.
“Most buyers, if they could have an 800-square-foot unit with $600 monthly fees or a cheaper 1,400-square-foot unit with $1,200 monthly fees, they’ll choose the more expensive, smaller unit — because they don’t want the higher fees. They can’t do the math on it,” he says.
There are some properties that Fleming said are always going to move, even in a down market. “It comes down to functionality: the condo townhouse market is always going to move because it’s a unique product. Same with the loft market.”
Recent data shows Fleming is right — a report by Zonda Urban found townhouse sales stayed resilient in the GTHA in 2024, accounting for their largest share of annual volume in over a decade at 43 per cent.
Of the 21 new condominium apartment projects that opened for sale in 2024, only 19 per cent sold at opening, down from a 2023 rate of 38 per cent. Of the 58 townhouse projects that opened for sale, 58 per cent sold at opening, up from 55 per cent in 2023.
Fleming suggests buyers look at older buildings rather than new ones: “Those ones are all renters, and they haven’t worked out the kinks of operation yet. I like at least a three- or four-year-old building because I want to see if they’re well-managed and well-funded, and if there are any major issues before I buy.”
He also noted that buyers tempted by discounts on condo units currently on the market should be wary of what they’re buying. “If a unit is priced at a 6 per cent discount to other units that you’ve seen, but it’s a building that’s 70 per cent rentals, sandwiched in between the Gardiner Expressway and the Lakeshore, there’s nothing walkable, there’s no amenities—do you really want to live there?” he said. “If it was a 46 per cent discount, then maybe let’s talk.”
Ultimately, Fleming notes there’s no rush for buyers. “It’s not like if you don’t buy today, by August prices are going to be up 15 per cent.”
