Comparing The Late 80’s GTA Condo Market Crash To Today

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There is an ongoing debate regarding a potential housing market crash in Toronto. Many analysts are able to draw parallels to housing crises in the past and are finding many similarities.

While there are some telling signs that the GTA housing bubble could burst could happen again (or at least become stagnant), the current GTA condominium market tells a much different story when compared to the Toronto condo crash in the late 1980’s. The condo market is seeing continual growth year over year, and continues to show healthy signs of maturation.

GTA condo market in 1989, vs. today

Ben Myers, the Senior Vice President of Market Research and Analytics at Fortress Real Developments, recently released this video comparing the GTA Condo Market in 1989 vs. Today. As you will discover in the video, the climate of the condo market in 1989 tells a far different story of the market we are in today.

Video – 1989 vs. Today

Key Facts and Takeaways

When comparing to the conditions of the previous GTA condo market collapse that happened in the late 1980’s to the today, there are some vast differences.

 

  • Current price growth in resale condominiums is up 15.1% year over year and new condominiums have experienced a 9.8% year over year.
  • The new condo market is on pace for a record setting year of transactions.
  • Resale condominiums saw a 67% annual growth in 1989, whereas in 2016, it has grown by 15.1%.
  • New condominium apartments in 1989 saw an annual growth of 42%, whereas in 2016, the growth was at 9.8%
  • Today, it is far more difficult to obtain construction financing. In the late ‘80’s projects required around 30% presale, whereas today it is at 60% or higher.
  • Down payments on pre-construction condos were $500 in the late 80’s. Today developers require 15 to 20% down payment.
  • The buyer is far more responsible to see that the pre-construction unit is sold.
  • Buying a condo used to be a lifestyle choice in the ‘80’s. Today, the condo market is being primarily driven by the ability to afford them vs. the extremely high Toronto housing market.

Sources: TREB, Urbanation, Forrest Real Developments

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Roy Bhandari