Apr 18 2012
New condos can be seen under construction just west of York St., north of the Gardiner Expressway and Lakeshore Blvd. in March.
Last year’s record pace of condo construction is starting to be felt across the GTA, with listings up 14 per cent in the first quarter of 2012.
Sales, on the other hand, were up by just 2% over the same period as condo buyers appear to be taking more of a wait-and-see attitude, hopeful that an increase in supply could start pushing prices down, some realtors say.
The average selling price of a GTA condo was up 3.7 per cent in the first quarter of 2012 — $334,952 compared to $322,857 year over year, according to statistics from the Toronto Real Estate Board (TREB.)
But prices downtown, where the vast majority of construction and sales occurred, hit $360,892 in the first three months of 2012, up from $348,779 a year ago.
That’s a far cry from the 10 per cent price jump seen in house prices during the same period, largely because of an unusual shortage of inventory that has been fuelling bidding wars and driving up prices.
Things are much different in the condo sector where downtown realtors say they are seeing fewer bidding wars for condos as more supply comes on the market, with the exception of a few high-demand areas where inventory remains low, such as the St. Lawrence Market area.
In fact, investors trying to sell their units in newer, higher-priced condo towers seem to be having a more difficult time just since January.
Since March of 2011, the so-called sales to listings ratio — a key real estate barometer for determining whether it’s a seller’s or buyer’s market – has gone from 49 per cent to 40 per cent. Thirty per cent is considered a buyer’s market.
While there is still lots of demand for downtown condos where you don’t need a car, buyers seem less willing to get involved in bidding wars.
Meanwhile Wednesday, a condo poll by TD Canada Trust found that 81 per cent of condo buyers in Toronto worry about being able to afford their mortgage payments.
Yet they are more willing than any other Canadian condo dwellers to pay the highest monthly maintenance fees — 17 per cent said they’d pay more than $600 per month, compared to 10 per cent nationally — for the convenience of living near transit and other amenities.
Ilan Joseph is a Real Estate Broker with Sutton Group and is co-founder of a 10-person award-winning Toronto real estate team. You can find him on Twitter and Google+. For over 10 years, Ilan has provided more than 1300 buyers and sellers valued advice and service, enabling them to reach their real estate goals. He’s kind of like the Bruce Willis of real estate.