Condo Market ReportSALES COMMENTARY: By now everyone knows that June was a record month for sales on the Toronto Real Estate Board. Sales were 27% ahead of June last year. For the condo market, sales were up 24% but Downtown sales were 40% higher than June ’08. The Etobicoke waterfront was ahead by 16%. Now the question is: what will happen in the second half of the year? Year-to-date, residential sales at 41,000 units are still 6% below those of ’08. We can already predict that July sales will be almost 30% higher than last year and will come close to matching June’s totals. In 2008, the market slowed over the summer and collapsed in the fall leaving us with 74,500 units sold (the same as 2002). Most experts forecast sales for 2009 of 65-70,000 units. Our own forecasts were for 72-75,000 sales and it looks like we will hit 80,000. Expect summer and fall sales to remain strong – much higher than in 2008 but at lower levels than we are now experiencing. The Condo market, especially Downtown continues to outperform the overall residential market. Most experts are concerned about the high number of presales from previous years sold to investors that may overhang the market. But most of today’s buyers want to move immediately. And there is a shortage of this product – last year there were 849 active condo listings Downtown in June and this year there were only 757. At the same time, there were 40% more sales, which translates into upward pressure on prices. It is safe to predict that condo prices will only go up for the balance of this year! This month we examined sales at 70 Mill Street in the Distillery District. We only tracked one unit, but this same unit was sold four times since being built. The unit is two bed rooms, two bath, with parking, two lockers and small balcony at just over a 1,000 sq.ft. The Builder sold this unit at the start of ’99 for $207,000. The same unit sold in’02 for $228,000, at the start of 2007 for $265,000, and in April of this year for $359,000 (it was listed for $349,000)! That’s a 73% increase in just over 10 years or a compounded growth rate of 5.5% - surprise, about the long term historical rate of appreciation with real estate! Today’s sale price at $350 per sqft. is great value for a unit this size. Condo fees are $450 a month and including heat, hydro, and water and are very reasonable too. Taxes in ’08 were just over $2100. RENTAL COMMENTARY: We are now entering the peak rental season. 246 one bedroom units were leased Downtown in June with the most popular being a one plus one with parking. The average price was $1600, which is about $50 higher than earlier this year. One bedroom units without parking start at $1400. The entry point for a bachelor without parking is $1200, going up to $1300. 131 two bedroom units were leased from an average low without parking at $1900 to a high of $2200. The market for three bedrooms is small. Expect to pay from $2450 to $3400. Like the sales market, properties are not staying on the market for long - an average of 15 days.

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