June was another strong month for residential sales according to statistics from the Toronto Real Estate Board. While sales were 5% lower than the record for June set in ?05, year-to-date numbers are still running 2% higher than last year?s record numbers. Active listings are currently sitting 14% higher than a year ago, which is a strong indication that overall price increases are moderating. The condo apartment market continues to outperform the overall market. This sub market experienced only a 2% decline in monthly sales from June ?05, while the Downtown condo market recorded an increase of 2%. The sales-to-active listing ratio for Downtown condos remained unchanged from a year ago at 44%. This is a strong indication that it is still a sellers? market and that prices will continue to rise throughout the balance of the year.
New condo projects continue to come to market and experts continue to underestimate demand from both investors and younger buyers. The classic argument was always that people working Downtown wanted to live Downtown. How could we continue to build condos without new office buildings? The answer lies on the Gardiner Expressway! At 6:00 p.m. rush hour, the traffic coming into town is almost equal to that going out! A recent conversation with a first time buyer confirmed my observations ? he was buying Downtown but worked in Newmarket. The reverse commute has arrived. People now want to live Downtown even if they don?t work Downtown! And that opens up a whole new market.
This month we examined sales at 1121 Bay St. ? an upscale condo just south of Bloor and Yorkville that was completed in late 2002. The first unit we looked was 590 sq.ft. with balcony ? one bedroom and no parking. It was sold by the builder in 2000 for $169,900. The identical unit, again without parking, sold in 2003 for $215,000 ? an increase of 26% over three years. Have prices escalated since then? We looked at two, two bedroom units. The first, which is 900 sq.ft. with two baths but no parking sold again from the builder in 2001 for $281,000 and the identical unit without parking sold for $329,000 in 2006. Just 17% over the five-year period. A slightly smaller two bedroom, but with parking, sold in 2004 for $319,000. The identical unit sold in June this year for $332,000. Again not a significant increase in prices. When you adjust for parking, both of these two bedroom units in a prime building are selling for less than $400 per sq.ft. There is still a lot of value left in this real estate cycle!
September is second only to May for rentals. So offer activity in July and August is always strong. There is little room to negotiate with owners at this time ? one-bedroom units without parking are going at $1350 ? the average time on market for these units is 16 days! One bedrooms with parking are leasing at $1500 with an average time on market of 13 days. Two bedroom units are averaging $2125 per month and they sit slightly longer on market ? 19 days! If you are thinking of renting for September, act quickly and be prepared to pay full list price!