The Toronto Real Estate Board reported April sales were 4% lower than the record April results of ?04. On a year-to-date basis, sales this year are running 6% behind the record numbers of last year. The condo apartment market achieved similar results for both the month and the year-to-date as the residential market ? off by 4% and 6%. However the downtown and west waterfront condo markets are outperforming the overall market in terms of sales. In April, downtown condo sales were up by 12% and the west waterfront by 22%. A partial explanation is that there is more product availability. The second factor is that the sale-to-listing ratio is holding up. Downtown the figure is 40% while in the west it is only 25%. On a year-to-date basis, sales are only 2% lower than last year.
While this market may appear to favour sellers, this is very much a ?checker board? market. Condos listed under $200,000 are selling quickly, with even some multiple offers! Those units in the $230,000 to $250,000 range ? the typical 600/700 sq.ft. units with parking are just sitting on the market. Over $300,000 to $500,000 there is strong demand for 1,000 to 1500 sq.ft. units. When you get over $500,000, the market is mixed as buyers get very particular and picky.
Some people are starting to think that it is too risky to be in the market. My answer is that the biggest risk is not being in the market!! Everyone needs accommodation and everyone has aspirations to own a bigger or nicer property. If you buy today and your property does not appreciate, chances are what you want to buy going forward will have changed very little. If your property goes up, then what you want to buy will too and you will still be in the same relative position. But if you don?t buy and prices go up appreciably then you will never get to buy! So you tell me what is the least risky option?
One of the hottest property types is the ?true loft? ? a warehouse conversion with beams and exposed brick. Don?t be fooled by ?soft lofts? that are new construction with high ceilings and big windows. Lofts are in demand by the under 40 crowd and with a shortage of real lofts ? few suitable buildings left ? expect prices for these units to keep rising! The first loft conversion in Toronto was the Candy Factory Lofts on Queen St. West. The developer first sold units in the late 1990?s for just over $200 per sq.ft. Today prices are $300-400 sq.ft. In terms of property appreciation, we looked at a unit at 1100 sq.ft. that sold in April of 2005 for $389,000. The identical unit sold in July of ?02 for $306,000 ? an increase of 27% in 33 months. A larger unit, over 1600 sq.ft., also sold in 2005 for $498,000. It had originally sold in ?99 for $347,000. Very few condos match these increases.
The market remains quite active. The two-bedroom unit market is balanced with rents remaining in the $2200 range. As more new condo projects are completed this year, we are starting to feel the impact of a surplus of one-bedroom units. Currently there are over 230 units for rent downtown ? the norm is about 100 units less. This is increasing the time taking to rent, and has lowered rental prices by $25 on average to $1500. Small junior one- bedroom or studio units in the $1200 range are renting much better.