Residential sales for June exceeded 8,000 properties ? a record for the month and 21% higher than June a year ago. While this is good news for sellers, it should be tempered by the fact that over 12,000 new listings hit the market in June as well, representing an increase of 39% year over year. Our summer forecast of stronger market activity and stable prices, made several months ago, seems surprisingly accurate!
The overall condo market was up only 9% over June of 2002, an indication that the detached housing market is still the strongest element of the residential market. The Etobicoke waterfront experienced a 30% jump in June condo sales from the depressed levels of last year (caused by the Lakeshore Rd. construction). Downtown, condo apartment sales were actually 11% lower than June of last year (which was an exceptional month) with most of the drop off coming east of Yonge St. Surprisingly the first six months of 2003 shows condo sales to be off only 4% from the first six months of 2002. But of more concern is that new listings are now growing at almost twice the rate of sales in this market.
So what is happening to prices? As we have been preaching, average prices are stable ? neither rising nor falling - but certain types of units are performing better than others. To illustrate the dichotomy in the market, we examined sales at 313 Richmond Street East, a popular condo building for first time buyers. The first unit we looked at was a two-bedroom/two bath unit of 925 sq.ft. with parking. The unit first sold in October of 2002 for $251,000 and then again in July of this year for $265,000 ? a gain of 5.5% in nine months. This is exactly the type of unit we have been recommending since the start of the year. Compare the price performance to an entry-level unit under 700 sq.ft. consisting of one bedroom and a den and no parking. The last sale, also in July of 2003 was $165,000. Previous sales of identical units last year were $176,00 and $172,000!! We rest our case!!
The demand for rental units has been extremely strong over the last six weeks. In fact our Company, which does more condo leasing than any company on the Toronto Real Estate Board, achieved record transaction levels. The good news for landlords is that vacancy levels for condos are starting to drop. The bad news for landlords is that rents are stabilizing at these lower levels, which of course is good news for tenants. One-bedroom units are renting in the $1250 - 1400 range, depending on the building. Popular two bedrooms are renting for $1700 ? 2000 and ?premium? two bedrooms are $2500+. While the high-end rental market is small, there is still a shortage of units in the $4,000 range.