2020… Good if you like roller coasters and surprise endings!
The real estate market continues its upward trend as home sales in the GTA were up again year-over-year for the fourth month in a row! Toronto Real Estate Board members sold 10,563 residential homes in October, up 25.1 % compared to 8,445 transactions in October 2019. Sales and new listings reached record levels for the month of October, but sales outstripped new listings, so our tight Seller’s Market continued with the average selling price for all home types combined reaching $968,318 – up 13.7 % compared to $851,877 in October 2019.
Year-over-year growth rates for sales and new listings diverged in some market segments. In the detached market segment, the pace of annual sales growth far outstripped growth in new listings, and prices increased sharply. The Condominium apartment market segment experienced more than double the new listings compared to October 2019, and prices were only up by 2.2 % over the same period.
So what has happened to the Condominium market? With Covid 19 closing down the borders, many investors who were achieving high rental rates renting to foreign students or as Air B&B were caught without tenants. Many decided to rent their units as 1 year leases. With so many extra units competing for tenants, the average rent dropped $200-300 per month for rent. Other investors decided to sell their units. So many extra units on the market kept price increases to 2.2%. Like always, its supply and demand! The real question is what will happen next year and how will it affect the market?
I believe that within a year, Covid 19 will be much better controlled. Tourists (Air B&B) and foreign students will be back! That means that condominiums will start their upward swing as well. The other factor that will create more sales in condominiums is that mortgage interest rates are at ridiculously low numbers, I have seen as low as 1.6% ! On a $500,000 mortgage, that’s $400 per month lower than just 2 years ago! Rents did go down, but so did monthly carrying costs!
I think this is the right time to invest in condominiums and income properties!
Let’s chat! Feel free to contact me if you have any questions or know of someone buying or selling. I appreciate your help and support!
Have a great November.