Even the most optimistic realtors would not have predicted an all time record sales month for March. The Toronto Real Estate Board reported over 9000 residential sales - up 30% over March of 2003. The condo market also achieved record sales volumes! The total condo apartment market was up 35% over 2003. The Downtown condo market was up by 54% and the Etobicoke Waterfront was up by 35% over last year's numbers. The market for units over $400,000 was also up by 38% over the same month last year. Record condo sales, although putting to shame those so-called experts forecast of a significant market decline, do not totally explain what is happening in the market. The monthly 'sales to total listing inventory' was 42% in March. (A balanced market has a figure of 25-35%, which suggests that this market should favour the seller.) But what we have is a shortage of prime properties - market-priced and larger units and a surplus of smaller units, which offer no special features (such as a view, balcony, etc.) Another trend is that certain buildings are 'hot'. The market is being driven by the under 40 crowd. 'Hot' means hardwood floors, stainless steel appliances and outdoor space in newer buildings. These buyers also want to live in buildings where there are other younger people. Older buildings are out of favour at this time, and it shows in the price per sq.ft. being reported. Going forward we are still predicting a strong market for the first half of 2004 but rising interest rates towards the end of this year will change the dynamics.
The Etobicoke Waterfront has been one of the weakest markets over the past six months. However in March, the 'monthly sales to total listing' inventory moved up to 25%. It had previously been as low as 14%! So what has been the impact on prices? In this report, we examined sales at Newport Beach (2111 Lake Shore Blvd.), which has the longest sales history of all of the newer buildings. We traced the history of a two bedroom/two bath unit with parking and a southwest view. It first sold in December of 2000 (just after registration) for $294,000. The very same unit sold again, two years later for $288,000. And would you believe that the same unit sold for the third time in early April of this year at $294,000! A smaller one bedroom plus den with parking sold in December of 2001 for $192,000 and the identical unit sold also in January of 2004 for $198,000. The point to be made is that even in the weakest of condo markets, there has been no drop in prices over a four-year period. Even with a 'doubling in the supply of condos, the market has still been able to absorb these units without any drop off in prices which again is not what the experts told us would happen!

Spring is usually a strong rental period but the market has become very price/rent sensitive. With record low interest rates, we are still seeing more renters moving to ownership which exerts downwards pressures on rents. We are now seeing some units sit vacant for more than 30 days. Owners are faced with a choice - leave a unit vacant or reduce the monthly rent by 8.33%! Currently, bachelor units can be found for a $1,000 per month. One bedrooms with parking are as low as $1,350 and two bedrooms start from $1,600 and can go up to $2,000. Finally, we have seen some high end units come down in rents by $500-750 per month over the last couple of months.

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