RBC: Toronto condo inventory growth surpasses all other Canadian markets

Weak immigration and the struggles of Airbnb investors are making their presence felt in the GTA

RBC: Toronto condo inventory growth surpasses all other Canadian markets

Toronto has far outstripped all other major Canadian markets in terms of condo supply growth, according to RBC Economics.

The downtown saw a substantial influx of listings – largely stemming from the mass exit of condo investors from Airbnb and similar platforms – that pushed the City of Toronto’s inventory up by 134% annually in September, RBC figures showed. Detached-home listings in the area fell by 12% during the same time frame.

The suburbs exhibited similar trends, with a year-over-year increase of 82% for condo listings and an annual decline of 34% for single-detached housing supply.

For perspective, the usual housing powerhouse of Vancouver had a comparatively muted 20.9% annual increase in condo listings in September.

Robert Hogue, senior economist at RBC, attributed this to significantly muted demand as borders closed once the coronavirus outbreak took hold of the global market.

“COVID-19 has severely disrupted the flow of immigrants moving to Canada – a major source of housing demand,” Hogue said.

Immigration into British Columbia fell 111% annually during the first half of 2020, according to official figures.

“Until immunization from COVID-19 reaches high levels in Canada and abroad … immigration is unlikely to rebound soon,” Hogue said in the RBC report. “To date, weak in-migration has had minimal impact on Canada’s overall housing market. But if sustained, we expect it will temper rental demand in larger markets as immigrants tend to rent in their first five to 10 years after landing into our country. This could have negative repercussions for condos and longer term, an extended period of weak in-migration could deplete future cohorts of first-time homebuyers.”