The residential market is down 20% in 2003 from 2002 year to date. The experts will tell you that 2002 was a record year and that this is still the second best year ever. What is apparent in this market is that there is a surplus of listings in total but a shortage of 'prime' listings. These prime listings are attracting multiple offers in many instances. So what do we mean by a prime listing? Prime listings are usually unique properties, mostly high end, detached/freehold, and Downtown. As reported by the Toronto Real Estate Board, condo sales in February were 11% lower than a year ago. On the Etobicoke Waterfront, condo sales were off by 17%; and Downtown, condo sales were off by 19%. If we look at the one area where most new condo construction has taken place (Bloor to the Waterfront, Yonge Street west to Dufferin), we now find that there are over 700 condos for sale - about a six month supply at current sales rates. And we know there will be even more units coming to market in this period! The price break-down is even more interesting. There are 424 condos for sale under $250,000 but just 71 over $400,000! Of the 71, 9 are priced from $700,000 to a $1,000,000 and 6 are available over a million. At the lower price ranges, buyers have too much choice and at the high end, buyers are complaining that there is too little choice! To illustrate the state of the current market, we examined sales at 211 Queens Quay, The Terminal Building. This is the most prestigious condo on the Waterfront and has only 72 units. Currently there are no units for sale. There has been one sale this year (before that, the most recent sale was June of 2002). The sale this year was a two bedroom unit with parking - about 1800 sq.ft. for $845,000. Of interest, the sale was at $469/sq.ft. and it sold in just 8 days ! There is always demand for this building. This same unit also sold in 2000. The increase for this unit was 37% over 33 months. Conversely in this market averaged sized condos are not appreciating.
The market for rentals is good or bad - depending on whether you're the tenant or the landlord. At the present time there is over 500 condo units to rent Downtown. And only 71 units were rented in February. With more units coming on stream each month, the rental market will not improve for investors any time soon. In fact February witnessed the first condo rental that we can remember leasing for less than a $1000 - $850 for a studio with no parking. That being said, two bedroom condos can be rented for $1600 - what one bedrooms went for just over a year ago. At the other end of the market, there is a shortage of high end rentals over $5,000 per month.