September followed August as another in the string of excellent sales results for the Toronto Real Estate Board with 7,600 sales taking place. This was 25% higher than September of 2010. On a year-to-date basis (for nine months), sales are ahead by 2.6% over last year and we should end the year at just under 90,000 sales – the second best year since 2007. The condo market continued to mirror the overall market for sales.
Looking to October, we expect sales to be only slightly higher than September, which would be the first sign of a slowing market. While active listings are still lower than a year ago (a sign that prices are not about to fall), there are less active buyers over the last few weeks. Mortgage restrictions introduced by the Federal Government in stages are now starting to impact demand. Sellers trying to maximize their price may have missed the peak for now and may have to wait to test the spring market.
Most pessimistic views tend to focus on the downtown condo market. Naysayers look at all those cranes in anticipation of a market correction. But at the end of September, active condo listings were 4% lower than the same time last year (all those new units were either bought by end users or were rented out). The downtown condo sale-to-list ratio now stands at 37% versus 29% last year and compares very favourably to the overall market at 40%. And trends going forward such high gas prices, traffic congestion and higher utility costs can only favour the downtown condo market.
In this Report we looked at the Bay Street condo market which is popular with both investors and end users who work in the downtown core. One of the newer, taller and perhaps most popular buildings are College Park. We looked at sales in both 761 and 763 Bay. The hottest unit, a one bedroom plus den with parking and locker sold in May of this year for $525,000 at 761 Bay. It occupied 755 sf on a mid level floor (the twenties) and sold for $695 per sf. Previously, the same unit sold in February of 2009 (the bottom of the real estate dip) for $365,000. That is a 43 % increase in 28 months! The second unit we tracked was at 763 Bay, a two bedroom plus den with parking and locker. It sold in April of 2008 (before the market dip) for $510,000 and then again in June of this year for $621,000. At 975 sf, that is a price of $637 per sf and a price appreciation of 22% over 38 months, or about 7% per year, which is consistent with our market. We also checked another sale of a small one bedroom with parking at 763 Bay and the price per sf was $750 on a sale that took place just last month. It is safe to say that condo prices on Bay Street are the highest in Toronto outside of Yorkville.
The rental market downtown is extremely tight. Multiple offers on rentals are not uncommon. In September 25 Studio were leased at an average price of $1350 per month, but the average list price was only $1320. Go figure! Over 215 one bedroom units were also rented from a low of $1550 without parking to a high of $1800 for a den plus parking. These are the highest rental prices we have seen this year. The market for two bedroom units, with over 125 units being rented, ranged from a low of $1900 without parking to a high of $2500 on average for a unit that included a den and parking. Days on market ranged from 3 to 10 days on average, depending on the unit. That is the shortest period we have seen. Tenants get your running shoes on. Don’t start shopping without a filled out Rental Application and an Employment Letter.