CONDO MARKET REPORT
2005 is tracking like most predicted. Overall sales for February were up 2% over February of last year and are now even on a year to date basis. Early indications for March suggest that sales will be at least 5% higher than in 2004. For the condo market, year to date sales also matched those of 2004. Downtown and Etobicoke Waterfront condos showed the same trends.
Looking forward, there are some interesting trends. First, the number of active condo listings downtown are down 29% from this time last year! (For the overall market active listings are 11% higher). Condo prices are rising for many units and prime condos are receiving multiple offers! But by the end of this year, a number of large condo projects will be completed at City Place, Waterpark City, and Radio City which will significantly increase the number of properties for sale. A word to potential sellers of one bedroom and small two bedroom units - sell now - the market in the Fall will be softer. For potential buyers - if you want an entry level condo, the selection will only get better throughout the year, so buy carefully. However, if you want a 'real' loft, a bigger condo, or one with a terrace or spectacular view (e.g. lake), the market/selection for these properties is NOT going to get better this year - what you can buy now is probably your best deal!
Many experts are calling for a housing bubble. There is no doubt that some buyers have over paid for freehold properties downtown. Condo prices will be better insulated. Looking ahead over the next five prices, real estate prices will go higher in Toronto. Will it be a straight line up? No. There will be a minor price correction sometime in this period but it will not be in 2005!!
Previous Reports have talked about 'hot' and 'cold' condo buildings. In this report we tracked prices in 33 Harbour Square - the oldest condo building on the Waterfront. Prices for the one bedroom units with parking - 1050 sq.ft., facing southeast have moved from a range of $260-270,000 in 2001 to around $300,000 this year. Prices for larger, renovated units have done even better. A 1450 sq.ft. unit sold for $363,000 in March of '04 and the same unit sold again in February of '05 for $380,000. At a sales price of $260 per Sq.Ft. that is great value! On average, units in this building have appreciated by just under 4% per year. What's the reason? The market to date has been driven by younger people who want to buy 'new'. They are also prepared to buy smaller units. Going forward, we will start to see more 'baby boomers' in the condo market and they will want bigger units. Our prediction is that 33 Harbour Square will change from a 'cold' to 'hot' building in 3-5 years, as buyers realize that size and location are more important than new!
In February one bedroom units with parking went from a low of $1250. The median listing price was $1600. For one bedroom units without parking, listing prices ranged from a low of $1100 to a median price of $1400. Monthly parking rents with a condo now average $150-200/month, depending on the building. If a parking space can be purchased for $20,000 and rented for $200 per month, the return for an investor is now better than from buying a condo unit!!!
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