Is the sales market hot? According to July statistics from the Toronto Real Estate Board, we experienced the second largest month on record with residential sales up 39% from July of 2003. Condo sales for the month were up 79% versus the same month last year. Downtown condo sales were up by 78% and the West End by 45%. Now all the so-called experts are changing their tune again! For those who religiously read this Commentary, they know that we predicted earlier this year that sales would be stronger in the second half of the year. The underlying fundamentals of strong demographics and low interest rates are driving the market. An unusually cold winter, the war in Iraq, and SARS had a drag on the spring market. With these factors behind us, what else would one expect? There is nothing magical about a monthly time frame. Market watchers need also to look at year-to-date figures. Residential sales in 2003 are still running 4% behind last year's record pace. Downtown condo sales are off by3% on a year-to-date basis from 2002. There is the same number of buyers as last year, just with more product to choose from.
So is the market hot? If you own a detached house in a prime neighbourhood south of the 401, the answer is yes. Otherwise the market is balanced. Looking at the Downtown condo market (west of Yonge St.) for July, we had just
over 200 sales, approximately 400 new listings and 300 listings expired or terminated. The ending inventory i.e.
condos for sale is still over 800 units. When you do the math, you know that prices are flat - not up or down.
This month we looked at condo sales in Grand Harbour on the Etobicoke lakefront. We traced the sales history of a 900+ sq.ft. unit - one bedroom + den, one and a half bath and parking. The first sale in October of '01 was $208,000.
There were two sales in September of '02 at $214,000 and $219,000. In '03 there were three sales: in February for $228,000, in March for $235,000, and in June for $222,000. Over two years prices are up 10%, with most of the increase occurring in '02 and the early part of '03. Note that prices are off slightly.
The strongest rental months are usually those leading up to September and this year it is particularly true. The surplus of rental units in City Place is gone. This surplus depressed the rental rates - one bedroom units with parking actually bottomed at $1200. With a better balance, we have already seen a slight increase in rental rates as these units are now going for $1300. We are also seeing less price negotiation than just a few months ago. People looking for $1100 rentals should look to apartments and not to condo buildings.