Most people know that detached homes in Toronto have been a better investment than condos looking at the past 12 years or longer. Could 2017 upset this long term trend? First here is a long view of the their performance. Since 2005, detached homes are up 3.8x whereas condos are up 2.3x.

This year may be different though. Condo prices have really started to move this year despite all the talk of government intervention this past month. Here is a chart that compares price appreciation just for 2017 so far:

Although house prices had a big jump in February, they've leveled off but condos are continuing their rise. It's already been a remarkable year all around and we hope the rest of the year is more calm and proves sustainable.

The median price of the downtown condo rose from $542,000 to $571,500. Just look at that chart, no further comment necessary.

The level of supply and demand actually decreased a little last month although it's still far above a balanced market. On the street, this translates into non stop bidding wars. Over the last 12 years, the average amount of time a condo is on the market is 29 days, last month it was the lowest we've ever seen at 9 days. That's just about the 1 week a property taking offers in a bidding war is on the market, incredible.

The number of condos selling is higher than typical representing the strong demand. 599 condos sold in April where typically we see about 350 units sell.

The supply is still far too low, about half of where it's been in previous years. To summarize the situation, there are just as many condos coming on the market for sale as previous years but the demand is so strong that it's reduced inventory to incredibly low levels, all of which results in increasing prices.

Will the proposed government measures calm the market? I don't think so and so far the market isn't showing any signs that they will. No measures put in place should discourage developers from increasing supply. The rent control proposal discourages developers from building new rental buildings and is counter productive. Condo landlords with 20% down are losing money every month so they're just trying to raise rent enough to break even. In my opinion, the stories you hear about doubling rent prices are actually landlords trying to get tenants out so they can clean up and sell the suites vacant so they get the most money possible. The landlords don't actually think the tenant will pay double their rent and they will not list the suite for rent at double the price because the market won't bear it.