Condo Market Reports
Toronto Market Report September-October 2017
A lot of people seem concerned about our real estate market – especially my agents! Yes, the market has been slow since April, and yes prices have backed off in the house but not the condo market. That’s because house prices had an unsustainable run up – not just this spring but over the last three years where we had double digit price increases.
In August TREB reported 6357 sales, down 35% from August of last year, but 8% higher than in July. During July, daily sales averaged 191 units. Over the first half of August it was 193, but in the last half it rose to 215 sales. In the condo market sales were 24% lower in August than the same month last year. Downtown condo sales were down by 22% but they were 15% higher than in July! A similar trend was evident in the Humber Bay condo market where sales in August were down by 16% compared to last year but flat compared to July.
Can you guess the strongest real estate market in 2017? It is luxury condos, fueled by baby boomers who are downsizing and people buying a second home. Looking at stats to the end of July, the most expensive condo sold in 2016 was $6 million. In 2017, it was $11.5 million. The number of condos sold over one million dollars this year was 86% higher than a year ago!
But there are experts who still believe that we are at the start of a major real estate correction. Our take is that these experts don’t live in Toronto or who are hoping to profit from a market correction. The reality is that the economic fundamentals for Toronto have not changed. Two bank prime increases to 3.2% will not slow this market. The rate increases are simply a reaction to robust job growth and higher wages – meaning more buyers who can afford more! The qualifying mortgage rate for insured mortgages is 4.84% but you can still get 5 year fixed rate mortgages under 3%! Another sign that the market is even stronger today can be found in the pre-construction market. A year ago, there were over fifteen thousand condo units that could be purchased. Today, the number is at 6,000. At the same time pre-construction prices are 27% higher than a year ago! That is a trend that can only mean higher condo prices going forward in the resale market.
Toronto Downtown Condos Year-Over-Year Comparison
This chart compares the sales, new listings, and active listings from August 2016 to August 2017. Fewer listings mean fewer sales but rising prices. Source: Toronto Real Estate Board
65 East Liberty Street: Zen Condos
This month we looked at sales at 65 East Liberty St in Liberty Village. The Zen condos are part of a three-building complex covering 65, 75, and 85 East Liberty with over 1200 units. The area is extremely popular with young people who can walk to BMO Field, King St., and high tech offices stretching to Dufferin. Our first unit is an entry level condo – one bedroom, no parking, no view, but it has a locker and small balcony. It sold in 2013 for $249,000 and again in March of this year (before the Kathleen Wynne pronouncement on real estate) for $401,000. That is an annual increase of 17%. At 592sf, that translates to a price of $677/sf. The second unit we looked at was a two bedroom, two bath unit with a 100sf balcony. It sold in 2014 for $413,000. It also sold in May of 2017 (after the Kathleen Wynne pronouncement) for $625,000. The increase was 15% per year over the period. The unit is just under 800sf. If you eliminate the price of the parking spot, the price for this unit is $732/sf. or $55/sf more than the unit sold back in March. For those non-believers, here is the proof that condo prices have not declined in the downtown market after April.
Number of Sales by Area for August 2017
This map shows the number of sales and median price for residential homes for August 2017 by municipal breakdown.