Toronto Condo Market Report September-October 2019

19 September 2019
Remax-Condos-Plus

Toronto Condo Real Estate Market Report July-August

SALES COMMENTARY

GTA Year-Over-Year Summary for July 2019

TREB reported 7,711 sales for August. We would describe this number as a return to more ‘normalized’ sales levels. See our Table below for August sales over the past seven years. While sales were lower than July, this is in-line with seasonal sales figures. We would also expect that September sales would be slightly lower again, before an uptick in October. Both ‘new’ and ‘active’ listings in August were lower in 2019 than they were a year ago. This trend confirms that prices are continuing to rise. In fact, a ‘sales-to-new listing’ ratio of 65% is ample proof that we have returned to a ‘sellers’ market’.

Looking at the condo market, there is no doubt that this market segment outperformed the overall market in the last twelve months. However, both sales and price increases are starting to slow. For August, condo sales were 3% higher than for the same month a year ago. On a year-to-date basis, overall condo sales were only 1% higher than for 2018.

A similar story is unfolding in the Downtown and Humber Bay Shores condo markets, where sales in August were unchanged from August of 2018. As we keep saying, one needs to look at listing activity to get a direction on prices. New condo listings Downtown in August were down 8% from August of 2018. For Humber Bay Shores, they were unchanged. Sales-to-new listings for these markets are at 66% - still a sellers’ market, an indication that prices will continue to increase. On a year-over-year basis, condo prices are up by 8% - remember in January the year-over-year increase was running at 10% - so there is some slowing in price increases.

Real estate ‘price bubbles’ occur when demand (buyers outstrips supply). These bubbles burst when supply catches up and exceeds demand. In Toronto we don’t see this happening any time soon. Population growth is increasing, not slowing, and Governments are taking little action to encourage an increase in supply (new housing). Recently a builder released 450 new pre-construction condos in central Toronto. There were 3,000 worksheets to purchase, submitted from agents representing buyers for product that will not arrive on the market for four years!

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August Sales on TREB

August Real Estate Sales on TREB

Sales in 2016 for the year were a record 113,040. We would describe 2019 as returning to 'normalized' levels.
Source: Toronto Real Estate Board

THE PINNACLE CENTRE CONDOS:   
12 YONGE STREET

Pinnacle Centre consists of four towers. It has a prime location between Scotia Centre and the waterfront. Amenities include a 70 ft indoor pool, whirlpool and sauna It even has an outdoor tennis court. We selected the 12 Yonge St. building.

The first unit we tracked was a one-bedroom with locker, 9 ft ceilings, and open balcony on a high floor facing east. It was sold by the builder in 2008 for $259,000 and then in 2012 for $312,000 and finally in May of 2019 for $550,000. At 509 sf, that works out to a price of $1080/sf. That’s the current market for prime locations downtown. Over 11 years, this unit has appreciated at a rate of 7% per year on average.

The second unit we tracked was a two-bedroom, two bath unit with parking and no locker. It is located on a mid-floor. This unit has been resold twice. First in 2017 for $610,000 and then in 2019 for $745,000. The 2017 sale was done just before the ‘supposed’ market correction. From that point it has appreciated by 22% in just two years. At 705 sf, the current price is $1060/sf. There are 297 units in this condo building and only two are currently for sale.

RENTAL COMMENTARY

August is usually the busiest month of the year. Leases are higher but rents have levelled off. Studios are renting at $1930 per month on average.

Starting with the one-bedroom market – no parking; there were just as many units leased in this segment as the total number of condo sales downtown in August. The average rent in this category was $2300 per month – again unchanged from July. Adding parking is about $150 per month while adding a den is only $125. For tenants, going the den route is the better option.

The two-bedroom market starts at $3,000 per month. And the high end of this market reaches to $3800 per month. The three-bedroom market used to be slow but now these units are leasing on average within nine days on market. There were only 33 three-bedroom units that were leased in August (as opposed to over 1,000 one-bedroom units). Expect to pay $4500 on average.

Finally, we don’t understand the fascination with Kijiji. For Tenants, you find a place to rent and you pay two months’ rent up front to an individual and you don’t even know if they own the condo. If you go through a brokerage, we know the status of the Landlord, and you make the deposit payable to the broker’s trust account which is insured. For Landlords, they do little if any background checking. The role of an agent is just not to find a Tenant but to gather information on that Tenant (from a completed application, to income proof and credit bureau score) so that the Landlord can make an informed decision on the worthiness of the Tenant. Agents don’t get paid for just finding a Tenant but only when the Tenant is acceptable to the Landlord and takes possession.

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TORONTO SALES AND MEDIAN PRICE BY AREA

Click on an area of Toronto to view the sales and median price for residential properties for the month of August 2019.

Source: Toronto Real Estate Market


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