January residential sales as reported by the Toronto Real Estate Board were down 10% from January of last year. Still sales were the second best in history for January. In the condo market, overall sales were down 13%. Downtown condo sales were even slower - down 19%! In the freehold (detached) market, it is the lack of good listings that has put a break on sales. For condos, the opposite is true - too many listings means that buyers can't make up their mind. In the Downtown market there are over 500 one-bedroom condos for sale - a four-month inventory at the current rate of sales. Prices have leveled off. Although prices are slightly lower than the summer, they are still about 5% higher than a year ago. Pricing a condo at ?market price? has never been so important in attracting potential buyers. Unusually cold weather has impacted the buying process. Only serious/hardy buyers are in the market now, but we do expect a spring rush when temperatures warm up. The overall economics of buying have not changed. At the present time, the threat of an Iraqi war has not impacted the market, except at the high-priced end. There was only one condo sold for over a million dollars in January, while there were over thirty units available for sale in this price range.
This month we examined sales at 1001 Bay Street (a very popular building for investors) because of the strong rental market from the university and hospitals. We looked at a one bedroom plus solarium units with parking and locker - 710 sq. ft. The highest sale price for this unit was in May of 2002 at $243,000 (103% of list price). The identical unit, on lower floors, sold for $219,500 and $212,000 in August and November of 2002. Two observations can be made: prices have peaked and prices in this building are still at $300/sq.ft.
What can we say about this market that has not already been said before. There is still strong demand for rental units Downtown, contrary to what many believe. However most of it is in the $1,200-1,300 per month range. The problem is that there are plenty of units for rent. What we are also seeing is price/rent negotiations taking place. Two years ago, owners set a rental price and refused to budge. Now we see negotiations taking place, much like the sales market. The rental market is soft in the $2,500- $4,000 range. There is a shortage of rentals in the $5,000 and up range.