Toronto’s condo market has cooled off for a while after a few weeks of gains, but the trend is still moving.
In the first quarter of 2018, the average price of a condo in the city fell 7 per cent to $2.45 million, according to the Toronto Real Estate Board.
That was below the 10-year average of $2,895,000, which rose to $3.13 million in the first three months of 2019.
The drop in prices is not a good sign for the industry, but it is a positive sign for some developers, who see the market as a potential cash cow for their companies.
The condo boom has been so strong, and so quick, that it has sparked a lot of speculation and hype, said Tom Latham, chief executive officer of condo firm Cushman and Wakefield and co-owner of the $1.2-million Milestone Condominiums.
“A lot of people are looking to make a quick buck, so we’re seeing them ask, ‘Are you selling a bundle of units or are you just selling a lot?'” said Latham. “
He said some condos are now priced as little as $1,500 a month, with buyers willing to pay as little or as much as they can afford. “
A lot of people are looking to make a quick buck, so we’re seeing them ask, ‘Are you selling a bundle of units or are you just selling a lot?'” said Latham.
He said some condos are now priced as little as $1,500 a month, with buyers willing to pay as little or as much as they can afford.
Some developers have also taken out “condo loans” to buy up units.
That’s a risky option, and Latham said some developers have been forced to lower the price to get out of it.
“Some of these units are going for $500,000 or $500 million,” he said.
Latham says he has never seen a developer price condos that low, but some developers are doing what they can to try to make up for the market downturn.
The city’s condo board said it expects prices to rise in 2018 and 2019, with condos now fetching between $1 million and $2 million.
For the first time in a decade, Toronto’s real estate board will release condo data in 2020, and it expects to see a lot less new condos on the market in the near future.
“In a year’s time, we’re going to be back to the market where we were in 2015, with lots of new units, and lots of condo units coming on the rental market,” said Loth.
Loth said he is worried that the number of units in the market will drop, especially for millennials, because the condo market is also facing a shortage of people who want to buy condos.
“It’s not going to happen overnight,” he warned.