There is no doubt that a late spring, the war in Iraq, and of course SARS has slowed this year's market. According to the Toronto Real Estate Board, residential sales for March were down 8% from March a year ago and 10.5% on a year to date basis. The condominium market showed similar trends - condo sales were off 9% in March. The Downtown condo market was just as soft - sales were off 8.5% from March a year ago in spite of the fact that there are hundreds of more listings on the market this year! So does this make it a buyers' market? No! What we have is a 'misperception' market. Buyers think prices are down by 20%, based on newspaper articles from people outside of the industry. The reality is that prices are flat with some smaller units off 5% from last summer. However most buyers still think that prices are rising because they hear about multiple offers occurring on a regular basis. The truth is that more and more real estate representatives are convincing clients to list their property under market, to accept no offers for a week, and then to hopefully receive multiple offers. The question is: when the property sells above list price is this really above or below market value? Recently our Company sold two properties in this fashion - one attracted only one full price offer and the second one attracted two offers over asking price. My guess is that both properties sold at market but the reported statistics and hearsay will convince owners that this is a sellers market, which could not be further from the truth
The rental market is fairly strong in terms of overall activity. The problem is that there is too much product available under $2,000 a month. And with more inventory coming on stream each month, it will take over a year to some balance to the market. Rental prices remain weak - one-bedroom units with parking at $1300 per month can easily be negotiated. But high priced rentals, because of limited supply, are moving quickly. Furnished rentals (under a year) have also picked up. For our investors, we are recommending that they look at the two-bedroom market - units in the 800 - 1000 sq.ft. range as suitable rentals.