Condo Market ReportSALES COMMENTARY: January sales on the Toronto Real Estate Board at 4986 units were up by 87% over 2009. Condo sales, performed even better, with an increase of over 100%. But that is not the real story. The numbers were expected. More importantly sales matched those of 2007 and 2008 for January. Hence we have established a bench mark for this market. Why some naysayers still see sales retreating to levels of five years ago makes little sense. Looking forward, we are forecasting February sales at 7600 units which will be an ’all time’ record for the month of February! But there are some factors which give pause to this euphoria. In the downtown condo market, the sale-to-list ratio was 44% in January, down from over 80% at the end of last year and the number of new listings in February is accelerating. While multiple offers are common on well priced units in the popular price range ($300-450,000), more and more listings that are not priced right will sit in this market. We also know that time is running out for sellers. The HST, coming July 1st, does not apply to resale housing but it will impact new sales coming after that date. The immediate impact is that consumers will be paying more for a lot of items not previously taxed such as utilities and maintenance contracts imbedded in condo fees, legal fees and realtor commissions. This, together with any increase in mortgage interest rates, will reduce the number of buyers who can qualify in the second half of the year. As we said in our forecast, 2010 will be the reverse of 2009 – strong first half, and lower second half! In total, we expect sales to match the record breaking year of 2007. (If you want to see our comments on the new mortgage qualification rules go to www.bloggingforcondos.com) In this issue, we examined sales at New Times Square – 109 Front Street E. in the St. Lawrence Market area. Prices in this building tend to be lower than others in the area. The first unit we looked at was a one-bedroom, 780sf, 2 level loft with parking and locker. The last sale was in August of 2009 at $332,000 (107% of list). It previously sold in 2006 for $245,000 and in 2003 for $215,000. The current price is $425 per sf and the unit has appreciated by 55% over 6 years or just under 9% per year. A second unit we looked at was a two-bedroom, two bath unit with parking and locker. At just over 900sf it sold at the end of 2009 for $450,000 (again 107% of list). It also sold in 2003 and 2001 for $295,000 each time. The current price of $490 per sf supports what we told you two years ago, that while smaller units were more expensive on a per sf basis, larger units would generate higher prices in the future and we are now seeing that changeover, as condo buyers start to move up and demand bigger units. The problem is that developers are building fewer big units over 1,000sf and that will be where the price premium will kick in as we go forward in this market. RENTAL COMMENTARY: The rental market in January picked up. Downtown, 20 studios, 197 one-bedroom, 75 two-bedroom, and 5 three-bedroom units were leased in January. Leasing activity has picked up about 20% from the end of last year. Rental prices are also holding steady with studios going for $1250, and one-bedroom units ranging from $1450 with no parking to $1650 for parking and a den. Two-bedroom units ranged from $2000 to $2500 for parking and a den. Three-bedroom units averaged $4500. Units are leasing for 100% of list price, on average and there has been the occasional ‘multiple offer’ situation as the vacancy rate for rental condos is still under 1%.

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