Toronto’s Real Estate Market Defies Expectations
September 23, 2020
Toronto’s real estate market continues to defy expectations and predictions! Judging by media reports, you’d think the real estate market was exceptionally busy. However, the experience of someone in the trenches (i.e. me), that’s not the full story.
There are still bidding wars happening, usually for fully renovated homes in hot neighbourhoods, which is something that has not changed. But a lot of listings are languishing and there’s not always a definitive explanation as to why they’re not moving.
It’s been a long time since there was such a marked difference between the single family home market and the condo market. Prices for single family homes are up 24% compared to August 2019 and they tend to sell fairly quickly. If you’re downsizing or moving out of the city it’s a good time to be selling a single family home because there are still people in condos looking for more space in the city.
One reason that starter condos are taking longer to sell is that people now have the luxury of being picky. There’s a lot of inventory on the market and buyers can wait for the right property. A buyer may decline to put in an offer because the view is less than ideal or it’s not exactly where they want to live. A few months ago, people were making decisions out of desperation (which is why I had recommended not making a move at that time). Buyers are now confident they’ll find the right place.
This is actually a great time to be a first-time buyer if you’re planning on staying in the unit for at least five years.
There are several reasons that there are more starter condos available than earlier this year.
The city’s rules about short term rentals (ie Airbnb) have gotten stricter. You can only rent out your primary residence and only for a certain amount of time. The way it’s being policed is that you have to have a licence. The first option an investor may have tried is to rent their units on a long-term lease, but again, because of the glut of units available, the rental market has softened so those units are now coming up for sale.
Students aren’t coming into Toronto for university since most courses are being offered online which means parents aren’t investing in buying or renting condos for their kids, either.
Some people bought downtown condos to be close to work, restaurants and theatres. But with the pandemic, they’re realizing those amenities are not that necessary and they would rather be close to the ground in a neighbourhood with access to parks and trails where there’s less density. They may also be tired of elevators and rules surrounding coronavirus.
So what can you do if you’re trying to sell a condo?
Stage it. Now more than ever a good staging job is critical to helping you stand out from the crowd. Even just a couple of months ago there was significantly less to choose from but now people can afford to be picky.
Price it correctly. With so much inventory available, something priced too high is only going to sit on the market, costing you the monthly nut for mortgage and maintenance fees.
Have patience. Properties across the board are taking longer to sell. Right now, it doesn’t always make sense to set an date to review offers or “hold off on offers” as they say in the industry.
If you don’t have to sell, hold off. I have every confidence that the Toronto condo market is going to come back. We live in a great city and once we figure out what normal looks like, restaurants, theatres and cultural activities will return and as appealing as it may sound right now to move out to the country, once you’ve gotten used to 24 hour grocery stores, endless options of food delivery and being able to walk to anything you want, it becomes less appealing that dinner and a show becomes a day trip.
If you have any questions about Toronto’s real estate market, please give me a call!