A new report says Toronto's condo market is facing its biggest test in decades as the number of investors losing money every month, and the amount they're losing, has ballooned.
WATCH: Despite an interest rate cut from the Bank of Canada , the Toronto and Vancouver real estate markets aren't heating up just yet. Nivrita Ganguly has the details and more in Business Matters for July 4, 2024 – Jul 4, 2024A new report says Canada ’s largest condo market is facing its biggest test in decades as the number of investors losing money every month, and the amount they’re losing, has ballooned.
The report by CIBC and Urbanation says rising costs have left 82 per cent of new condo investors with a mortgage as cash flow negative in the first half of the year, up from 52 per cent in 2022. The report showed that investors who closed on a condo in 2023 had negative monthly cash flow of $597, up from $223 per month in 2022, while in 2021 and 2020, investors were still on average making monthly profits.
The report says higher interest costs, along completions on higher-priced condos, drove up ownership costs by 21 per cent last year, far ahead of the eight per cent rise in rents.Authors Benjamin Tal and Shawn Hildebrant say the financial picture is dramatically slowing sales and condo completions, which will create a stagnation in housing stock in the coming years.
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