Condo Market Report - August 2023
Sales for July were 5,250 on TRREB which are weak. They are 29% lower than for June (but 8% higher than July of last year). What to take away from these numbers? Not much. August sales are usually higher than for July. When we look at daily showings both on TRREB, and for our own Brokerages, the monthly changes from July to August are almost the same. This is an indication that sales are not picking up. That’s because both buyers and sellers are waiting for the next Bank of Canada and Federal Reserve interest rate announcements in September. Until then they are sitting on their hands.
The saving grace for sellers has been a lack of listings, which has created a market balance and kept prices level. But the sales-to-new listings ratio is dropping. For the overall market it now sits at 38%. For the Downtown condo market, it is at 30%. These figures confirm what we said last month: we are well into a BUYERS’ MARKET. Prices are weakening.
We have always maintained that you can never time the market. Real estate is a long-term investment and those who try to ‘flip’ will always lose eventually. If you must sell, do it in September or wait until next year when interest rates will be lower or at least stable, which will encourage more buyers to enter the market.
2023 SALES TO NEW LISTINGS RATIO
THE PRE-CONSTRUCTION MARKET AND ASSIGNMENTS
In our last Report we talked about pre-construction prices in Toronto that were in the $1400 psf. range which has reduced new construction launches. With the resale market at just under $1,000 psf. the price gap is still too large. Now pre-construction buyers from 2018 and later are being asked to close on their purchase. Many can’t get financing and are just trying to recover their deposits. An assignment on Church is listed at $70,000 below the original purchase price. The problem is that they are still asking $1200 psf. Two more properties on Peter Street are asking $1130 and $1160 psf.
Another assignment in Mississauga is listed for the original purchase price at $950 psf. The resale market is $800.
Sellers need to realize that pricing to recover your deposits is not the answer to selling. You need to price at market! If buyers remain patient, there are some excellent opportunities before the end of the year.
GTA AVERAGE PRICE PSF FOR NEW CONDO APARTMENTS
In July over 2900 condos were leased in the Downtown and Harbour Bay markets. This was the highest monthly total for the year, which reflects students looking for accommodation for the start of the school year. The peak for the rental market is either July or August, so we will see. By month end there were just 1700 available units for rent.
Never have we experienced the number of multiple offers for rentals. Not just one or two bids per property but 8 to10. We are seeing tenants prepared to pay 12 months up front, not being successful.
Rental prices moved higher by 3% on average in just one month. The sold/leased price was 101% of the List price across all bedroom types. The table below represents average rents by bedroom type. Extras for parking ($300) and a second bathroom ($500) need to be taken into account.
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