With listings in both the freehold and condo sectors slowing down as we near the end of the month, the debate rages on. Should buyers wait until the New Year to purchase a new home or jump into the market now? There are different points of view on this topic. If you wait there will be more choice BUT you will be competing with all the other buyers who are also waiting for the spring market. More buyers bidding on the same home will drive prices higher. If you buy now there is less choice but fewer buyers. Still, demand for single-family homes supported by low interest rates and teleworkers, will keep the housing market resilient overall. What’s driving the market now is the lack of inventory…
Read moreUPDATE FOR THE WEEK ENDING NOVEMBER 27TH, 2020
UPDATE FOR THE WEEK ENDING NOVEMBER 20TH, 2020
Toronto Condo Prices Down 9% from Peak - Recent news articles about Toronto’s condo market range from pessimistic to optimistic leaving many wondering what exactly is happening. In early October condo listings surged 215% in downtown Toronto, while a couple of weeks later an article titled “Toronto condo prices rise over 8% even as new listings surge”.
Jason Mercer, chief market analyst with the TRREB is saying “there is still enough competition between buyers to support average selling prices substantially above last year’s levels.” While this is technically true, it leaves one with the impression that condo prices are trending up when in fact average condo prices have been trending down over the past seven months. To better understand how prices can be up over last year but still be trending down we’ll need to look at some data on the downtown Toronto condo market (the area south of Bloor between the DVP and Dufferin) since it’s the hardest hit area in the GTA.
Condo prices downtown were relatively steady during the first three quarters of 2019. The average price for a downtown condo in the third quarter of 2019 was $714K. But in the last quarter of 2019 and the first quarter of 2020 the market changed significantly. A sudden surge in demand coupled with very tight inventory resulted in a very competitive market which pushed average prices up to $820K in the first quarter of 2020, a $100K (15%) increase in just six months. Since then average condo prices downtown fell by 9% to just under $750K.
We typically don’t analyze changes in home prices or sales on a month over month or quarter over quarter basis. Real estate is a seasonal business, so we typically compare prices and sales against the same period last year. But the risk with only comparing home prices year over year is that it can sometimes give us a false impression of the market today. That’s why the statement below from Urbanation’s Shaun Hildebrand really captures what is happening in the condo market today:
“It’s very likely that by the first quarter of 2021 we could be in a situation where we see double digit year over year declines in average condo prices downtown, and that’s under a scenario where prices remain flat from where they are right now.”
Shaun’s prediction was not based on a forecast of the future, but a better understanding of where the market is today. Condo prices are already down 9% from their peak, and even if they remain flat for the next five months, we will see close to a double-digit year over year decline in downtown condo prices in the first quarter. The bigger question will be whether or not condo prices stay flat over the next five months or whether we will see more downward pressure on prices. (Move Smartly Report)
UPDATE FOR THE WEEK ENDING NOVEMBER 13TH, 2020
How is it that our stock markets and house prices look like this is the best of times? Many people have been scratching their heads lately trying to understand how it is that Canada’s average house price jumped more than 17 per cent during the worst economic crisis to hit the world in decades. There is an answer, but to get to it, you have to learn the same uncomfortable lesson that the head of Canada Mortgage and Housing Corp. learned this year. And that lesson is that we are living in an illusion created by central bank money-printing and excessive government spending. If house prices seem detached from reality, it’s because they are…
Read moreUPDATE FOR THE WEEK ENDING NOVEMBER 6TH, 2020
The Toronto region had its fourth consecutive month of record sales volumes in October with 10,563 homes sold, up 25% from October 2019 and the Toronto Real Estate Board is forecasting record or near-record sales to continue through the balance of the year. The average sale price for the GTA was up 13.7% to $968,318 and for the City of Toronto it was up 10.8% to $1,025,925. Detached homes led the way, with sales up 33.9% and an average sale price of $1,204,844, an increase of 14.8%…
Read moreBOSLEY MARKET SNAPSHOT - OCTOBER 2020
UPDATE FOR THE WEEK ENDING OCTOBER 30TH, 2020
Housing lot sizes continue to shrink. There are many attractions of suburban houses, but one of the key selling points was that as you move out of the city you will get more land and more backyard. Think again. That metric is under stress in Canada’s most populous region, and new buyers are finding that the average lot size is shrinking…
Read moreMARKET UPDATE FOR THE WEEK ENDING OCTOBER 23RD, 2020
With the high stakes of the upcoming US presidential election on November 3rd, people are getting nervous about what they will be waking up to. If you’ve been holding off purchasing property or investing until after the election because of the uncertainty, here is some information you might want to consider…
Read moreMARKET UPDATE FOR THE WEEK ENDING OCTOBER 16TH, 2020
Fleeing the city? It may be cheaper to buy a home in the “burbs” but have you stopped to think about some of the extra costs? Property taxes are a good place to start. Toronto and Vancouver, the country’s two most expensive housing markets: they’re both property tax bargains. Within the province of Ontario, Toronto’s property tax rates were found to be the lowest among 35 municipalities in a 2019 survey. More houses and more expensive property values help keep property tax rates in big cities lower. A recent comparison found that a Vancouver home assessed at $1-million would have a property tax bill of $2,468 annually, while a similarly assessed home in Halifax would have a tax bill of $11,085…
Read moreMARKET UPDATE FOR THE WEEK ENDING OCTOBER 9TH, 2020
Thanksgiving marks a special time of year in which we express gratitude and something to be thankful for. This year is going to be a little different. Gathering around a table with loved ones to enjoy a bountiful feast will have to wait. We have to plan to make sure this year's Thanksgiving holiday is safe during this pandemic, Canada’s top public health officer has urged, as case counts continue to soar in several parts of the country, especially Ontario and Quebec…
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