Newspapers have documented the slowing of the Toronto real estate market – off about 15% from last year. Toronto condos have also recorded lower sales in 2008 – about 11% lower.
Negative press has made many ‘baby boomers’ more cautious. A slowing economy and the U.S. mortgage market problems which have spilled into the U.S. real estate market have made these people think that it is only a matter of time before Toronto prices trend down. The result has been a slowing in sales for condos priced over $500,000. Still condo prices have moved up another 5% this year – steady but hardly an indication of a price bubble.
On the other hand, ‘first time buyers’ either don’t read the papers or they don’t know the meaning of the word recession! Their belief is why worry about the next year, long term real estate has always been an excellent investment and you cannot dispute that! The proof – sales of condos in the $300,000 to $400,00 range are 21% higher than July of 2007.
But the other group still buying condos in Toronto are foreign buyers. They believe that Toronto condo prices are still under valued versus other major markets around the world. And they are right. Saturday’s Toronto Star showed that high end condos are priced at half to one third of the prices, of condos in London, Paris, New York, Sydney, and Dubai. And when you think that condo prices are also lower in Toronto than Vancouver or Calgary, then the chance of a price correction for Toronto condos is not on the immediate horizon!