Until recently, there was no question that condos in Toronto are an incredible investment opportunity. You couldn’t visit a local news site without seeing a headline about the red-hot market. Then the pandemic happened.
Like the rest of the world, this city has changed dramatically in the past few months—and local real estate is no exception. It has many would-be buyers questioning whether they should put their plans to purchase an income property on hold—indefinitely.
If you’re wondering what’s happening in the condo market—and what it could mean for your future purchase—here are a few things to think about…
A challenging spring
To say that the last few months have been challenging for those entering the market is an understatement. For buyers, COVID-19 has made the logistics of viewing properties, navigating the purchase process, and moving into a new home, more complicated. For sellers, it’s meant adapting to big changes when it comes to staging, showing, and taking the steps required to make a sale.
The good news? We agents have dedicated ourselves to making real estate safer during the age of social distancing. Luckily, the flexibility of our clients has been making it work. As a result, successful transactions have taken place, and many buyers and sellers have achieved outcomes they’re happy with.
Of course, we have to acknowledge that the real estate market has been affected by COVID-19. Let’s take a closer look at how.
What’s been happening in the condo market?
This March, condo sales in Toronto were up 4.2 per cent from the same month last year. The average price for a unit rose by 18 per cent. But a closer look reveals that the first two weeks of March were driving these numbers—and the second half of the month was a different story.
By April, condo transactions were down by a whopping 69 per cent, and the average price for a unit dropped by 4 per cent. For all property types, sales shrunk 67 per cent, and listings were down by 64 per cent. Unsurprisingly, the pandemic that kept us all at home was also having a massive impact on the market.
May figures showed a slight improvement. Condo sales were down by 58 per cent year-over-year—up from the previous month. Average prices rose by 5 per cent. For even more perspective, consider what was happening month-over-month. On the whole, property transactions were up by 47.5 per cent.
Recent reports indicate that home sales continue to recover through June. It’s currently detached homes that stand out, but that doesn’t mean the demand for condos has been permanently dampened.
Speculating about the real estate market is always risky. None of us knows what the future holds—especially in these unprecedented times. That said, there are a few things that prospective buyers and sellers can keep in mind as they navigate the condo market.
First off, the fact that there are more detached-home transactions happening right now means there’s an opportunity for condo buyers. There are more vacant units out there than we’ve seen in a while. But what about demand?
Toronto’s population is set to increase dramatically, hitting 8 million by 2031. Part of the reason the condo market has been so hot in recent years is because of the number of people searching for housing in the city.
Of course, travel restrictions are impacting growth for the time being. But as the economy slowly reopens (and Canada makes strides in battling the virus) there’s no reason to believe that this will be the case long-term.
Likewise, while many homeowners and renters are staying put for now, the city’s market is resilient. There’s bound to be a significant uptick in market activity—though it may not be clear when that will happen. One of the best things you can do as a prospective buyer is keep your eye on the market.
At the end of the day…
You should never make a purchase you’re not entirely comfortable with and excited about. That’s why a wait-and-see approach makes sense for many buyers. But if you do decide to make a purchase, the investment basics still apply.
Do the math. Look for a unit with desirable features in a popular (or up-and-coming) neighbourhood. And of course, work with an agent who knows the local condo market inside and out.
Last but not least, make sure you know all relevant safety protocols related to your potential transaction. If you’re mentally prepared to buy during this challenging time, there’s no reason your purchase can’t be a success!
Have questions about what’s happening in the Toronto condo market? Call or text to learn more: 416-500-5360 / Email: firstname.lastname@example.org