TrueCondos.com – The Best Source for Toronto Condos

Canadian Real Estate is Boring

A client of mine forwarded this very cool interactive flash-based chart from The Economist. It shows the house price index, actual house price movement for several countries over the past 20 years.  (The above is just an image of the actual chart. I have embedded the actual flash chart in my blog. Click ‘Continue Reading’ to try it.)

It is interesting to see how Canada’s house prices stack up against other countries over the last 20 years. The same old story holds true: since 1990, Canadian real estate has been very boring. Appreciating at very modest but steady rates compare to the huge ups and downs of several other countries. Our downturn we experienced last year was nothing compared to other countries. This is disappointing news to the doomsayers who fervently believe we are constantly heading for a massive market ‘correction’.

(more…)

New Condo Sales Back From The Dead

After nearly a year of massive declines in sales and stagnant or falling prices, it seems that new condos are back. Urbanation’s sales figures for Q2 2009 show a dramatic change from Q1. We aren’t back to the hedy days of 2007-2008, but 2963 units sold sounds a heck of a lot healthier than the paltry 917 sold in Q1. Still, the numbers are 40% below Q2 2008 when 4,962 new condos were sold.

In the past 3 months, I’ve personally been involved with 3 major new condo launches or relaunches: FLY, One Cole, and Liberty Market Lofts. All three saw sales in the hundreds of units in a just a matter of 2 or 3 days. This was the norm back in 2007-2008, where new condos were launching every week and if they weren’t quick to raise their prices after initial launch they would sell out faster than you can say ‘economic collapse’.

Now some developers are starting to do something I wouldn’t have predicted just 3 months ago: raise prices. Check out one of Brad Lamb’s recent ‘tweets‘. And all this is taking place concurrently with the resurgence of the resale market. It seems that the lack of inventory in the resale market and elevating prices have people once again looking at new developments as a viable alternative. More bodies in the new condo sales centres of late has developers thinking less about lowering prices and more about raising them.

The focus now for buyers is ‘where can I get the best price, the best value for my investment long term’. No longer are they swayed by frilly incentives like free maintenance fees or low interest rates. Buyers are returning to the price per square foot equation as the best predictor for long-term ROI.

Still, there are more shoes to drop. More condo projects will be axed or relaunched in the coming months. I expect an active fall for the new condo market and more opportunities for buyers and investors to come.

History In The Making?

The Toronto real estate market has undergone such a massive turnaround over the past 3 months I wouldn’t doubt that we will look back on this as an historic event. I’m not saying things will forever be blue skies and sunshine for Toronto real estate investors and home owners, but its clear that in the past 12 months we have witnessed 2 seismic shifts. The first happened in October 2008 when the market began to free fall, and then the second occurred around May 1st when buyers came out of the woodwork in droves and ate up every available listing in sight, sending prices sky rocketing.

I’ve been talking a lot lately about supply and demand on this blog. The figures are staggering over the past few months. It is becoming increasingly difficult for the analysts and economists to explain what has happened in this city over this relatively short period of time.

Rather than try to add more words to the discussion, I found a great visual display over at guava.ca that illustrates what I’ve been talking about. Take a look through the charts found on this great site and see how the last 12 months compares to activity over the past 5 years. Look at the “V” shape for the total months of inventory. Very revealing.

chart from guava.ca

Buyers Take a Beating in June

The headlines all proclaim that June was the “best month on record“, but if you were a buyer in the month of June, you’d probably disagree. As usual, let’s take a look at the numbers just for downtown condos.

In C01 (downtown west) let’s compare the June numbers from the past 3 years:

SALES: 2007 – 336 sales | 2008 – 276 sales | 2009 – 400 sales (up 45% from ‘08 and up 19% from ‘07)

AVG PRICES: 2007 – $315,207 | 2008 – $360,010 | 2009 – $340,895 (down 5% from ‘08, up 8% from ‘07)

MEDIAN PRICES: 2007 – $281,000 | 2008 – $307,570 | 2009 – $307,500 (flat from ‘08, up 9% from ‘07)

SALES:ACTIVE LISTING RATIO: 2007 – 71% | 2008 – 44% | 2009 – 70%

In C08 (downtown east) let’s compare the June numbers from the past 3 years:

SALES: 2007 – 123 sales | 2008 – 126 sales | 2009 – 165 sales (up 31% from ‘08 and up 34% from ‘07)

AVG PRICES: 2007 – $309,449 | 2008 – $322,003 | 2009 – $345,465 (down 7% from ‘08, up 12% from ‘07)

MEDIAN PRICES: 2007 – $271,000 | 2008 – $303,500 | 2009 – $327,000 (up 8% from ‘08, up 21% from ‘07)

SALES:ACTIVE LISTING RATIO: 2007 – 90% | 2008 – 57% | 2009 – 88%

Sales are way up over last year and even above where they were in 2007. If you look at the sales:active listing ratios, the numbers are off the charts in favour of seller’s. Supply is just not nearly keeping up with demand.

Median prices for downtown west (where the bulk of condo activity occurs downtown) are basically flat from last year which fits with anecdotal evidence that suggests prices are right back to where they were at the peak of the market.

What does the future hold? I think June will go down as the busiest month of 2009. I think July and August will be very active months, however, heading into the fall market and into the winter I have to believe we have no where to go but down (in terms of number of sales and directional pressure on prices). Things should be improving for buyers soon. Interest rates have gone up substantially of late, and hopefully as some new condo buildings come online over the next few months, we will see a bump in inventory levels.

For additional reading check out “Alarming Inbalance in Toronto’s Real Estate Market“.

Questions? Comments? I’d love to hear from you.

May Stats Show Sellers in Control Once Again

The Stats are out for the month of May from TREB, and as I predicted in my last post, they show May as being the busiest month of the year so far.

Let’s break down the numbers for downtown condo sales:

In C01 (downtown west), there were 325 sales compared to 302 in May ‘08 which represents an increase in sales of about 8%.

• Average prices were down from $372K to $327K BUT the median price was only down from $320K to $304K. Clearly the high-end of the condo market has been hit hard over the past year.

In C08 (downtown east), there were 134 sales this year versus 120 last year (+12%).

• Average prices in C08 were $298K versus $314K last year, and median price was $280K versus $293K last year. Again showing the trend that the average price has been hit harder than the median price.

Also of note, the Sales:Active Listing ratios for condos for C01 and C08 in May were 48% and 50% respectively. Clearly May was a seller’s market. This is a huge change from just a few months ago when we were seeing Sales:Active ratios in the 13-15% range.

Still that is nothing compared to the absolute frenzy that is happening in some areas of our city like East York, Riverdale, The Danforth, Leslieville, and the Beach. In these areas May had Sales:Active listing ratios in the 70-100% range.

Why the temporary insanity in the market? In my opinion it boils down to one simple reason: Supply and Demand. Supply is way down because seller’s feel a recession is no time to sell, and Demand is up because interest rates are at all-time lows.

Questions? Comments. You know what to do.

Supply and Demand

We are in the middle of a mini-bull market in the resale property market downtown. When TREB released their mid-month statistics last week, many people were surprised that they showed for the first time in a year that prices and sales were actually higher for the city of Toronto than they were a year before. 

Realtors all over the city have known for weeks that a significant change in the market had taken place. After months of growing inventory and stagnant demand, suddenly buyers were everywhere, and now that the dust is starting to settle, there’s no inventory left!

If you are thinking of selling, please do! We need the inventory. I’ve got several clients who are just waiting for the right property to come up. They are ready to buy now, but there is a major shortage of (good) inventory right now. As a result, just about every property that comes up that is priced well and shows well has been receiving multiple offers and bidding wars.

Looking closer at just downtown condos:

• In C01 (downtown west), April saw 290 sales versus 271 in April 2008. Average prices are $329K versus $346K last year. So sales are up 7% but prices are still down about 5% for April. 
• In C08 (downtown east), April sales were 125 versus 84 in ‘08. Average prices were $319K versus $355K last year. That translates into a 48% increase in sales and a 10% drop in prices.

The trend that is developing means that I expect sale prices for the month of May (when they come out in a couple weeks) to be close to equal with that of 2008 prices and the number of sales will probably still be about 5-10% over last years numbers.

Is this just a spring boost? Or will this trend continue through the summer and fall? More thoughts on this in a couple weeks once I see the May numbers.

Questions? Comments? You know what to do.

Signs of Life? February Condo Market Stats Have a Pulse

It’s that time of the month again, TREB just released their stats for February. The numbers aren’t as painful to look at as in the previous few months, but does this mean we are on the way to recovery?

(more…)

New Condo Sales Still Down; Prices Still Up

[**CHART REMOVED DUE TO COPYRIGHT CLAIM BY REALNET CANADA INC.**]

Realnet has released the sales figures for new condos for the month of January. Prices are still increasing despite the fact that the number of sales continues to be significantly lower than a year ago.

Prices are up 8% for high rise condos while sales were down 64% compared to January 2008. 

(more…)

2009 Begins As a Buyer’s Market

TREB has their January stats up for resale properties. Looking at the numbers for downtown condos it is now very clear: we are in a serious buyer’s market. 

(more…)

Price of New Condos Holding Strong Despite Plummeting Sales

[**CHART REMOVED DUE TO COPYRIGHT CLAIM BY REALNET CANADA INC.**]

The final sales figures for new condos from Realnet are in for the December and the year 2008. In short, prices are still going up, while sales have dropped off significantly. [Note: these numbers are for new condos. For resale condos, see my previous posts for more stats on the downtown condo market.] (more…)