Toronto Condo Market Report June 2021
For the second month in a row, sales were lower than the previous month. In May sales on TRREB were 11,951 units. Before anyone holds a tag day for agents, this May was the largest May sales month since 2016. Going forward, we can tell you that by July, monthly sales will be lower this year than in 2020!
The focus for both buyers and sellers should be on listings – both ‘new’ for the month (May) and ‘active’ (available at month’s end). New listings in May were double 2020 and active listings were 7% higher than a year ago. Most focus is on the sales-to-new listings ratio and where that sits in the 40-60% range. Below 40% it is a buyers’ market and above 60% it favours sellers. But what we also track is the ratio between new listings during the month and active listings at month’s end. If the active is lower than the new listings, then we know that we still have a shortage of listings for buyers currently in the market. For the overall market, active listings were only 66% of the ‘new’ listings that came on in May. In May of 2020, the number was 125%, meaning that supply was increasing a year ago. While showings on listings have decreased from March, sellers feel no pressure to reduce prices at this time even though the market is slowing. See Table below.
In the Downtown/Humber Bay condo market, sales declined in May from April by 15% (which is slightly higher than the overall market). Active listings in this market are 83% of new listings, again indicating that supply is shrinking. At the same time new listings only declined by 7% from April which further supports the fact that this market is still slightly underperforming the overall market. We expect that with increased vaccination numbers for residents and when borders are opened, that this market will outperform the overall market beginning in September.
Figure 1: This graph tracks the ratio between new listings during the month and active to new listings. If the active is lower than the new listings, then we know that we still have a shortage of listings for buyers currently in the market.
Figure 2: This chart plots monthly MLS Sales-to-new listings ratio for the current year and the previous three years. The recurring seasonal trend can be examined along with comparisions to previous years for each month.
This is for those who want to avoid lengthy drive times and instead want to focus on a ‘waterfront cottage’ in the City. We looked at condos in three different markets: downtown itself on Queens Quay, Humber Bay Shores in Etobicoke, and Port Credit in Mississauga. The three condos we selected were: 99 Harbour Square, 2121 Lake Shore, and One Hurontario. All our sales were from 2021. All units had one parking, one locker, and a balcony. On a price per sf basis, Downtown was the most expensive, Humber Bay was next, and Port Credit had the lowest prices. This same trend was evident in condo sizes. Smallest to biggest in Mississauga. The Table below summarizes our findings:
[We looked at Price per Sq.Ft., Number of Sales, Square footage and the distance the property was from the waterfront.]
*proximity to water had an impact on price of $50-100 per SqFt
In looking at the first five months of 2021, these are the facts:
1. Numbers of units leased are up over 70% from 2020. So, there is still a demand to live downtown.
2. Rents this year are still 12 to 21% lower than this time a year ago. The biggest decrease is at the bachelor level and the smallest is for the three-bedroom unit. Rents are 3-5% higher in May than in January. Bachelor units are at $1400, one-bedrooms in the $1800-$1900 range; and two-bedrooms in the $2600 range.
3. In Toronto, 33% of all apartment condos are in the rental market.
4. The Vacancy Rate in Toronto for apartment condos is 1.7%.