Monday, July 9, 2012
Toronto condos: Finally a buyers market
It’s the first time in six years, other than a brief few months when the condo market stalled during the Great Recession of 2008/09, that it hasn’t been a seller’s market, says la Fleur after analyzing Toronto Real Estate Board sales and listings statistics released this week.
“Buyers: Time to Smile,” la Fleur told clients in his blog Friday. “With listings growing and sales falling, the deals will be out there if you know where to find them.”
“Sellers: Time to Get Serious,” he warned. “Gone are the days where anything will sell at any price.”
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But for how long?
Housing experts are being cautious about TREB’s June numbers which show condos sales dipped 20 per cent in the 905 regions last month compared to June, 2011, and 18 per cent in the City of Toronto.
The more telling statistic, says la Fleur, is the sales to listings ratio — basically, the absorption rate — which is lower than last year and has been trending towards buyer’s territory since March.
He anticipates prices should start to decline — although not too dramatically — come the fall.
“There are still bidding wars, but there are also a lot of listings that aren’t selling,” adds realtor Brian Persaud. “But last year was a crazy year, so I think we’re just going back to a more traditional market where things slow down in summer.”
While the year started out unusually strong for new condo sales, things have fizzled considerably since March and at least three developers have put projects on hold. It’s still unclear how big a damper tighter mortgage lending rules will add, especially for first-time buyers, when they kick in July 9.
The biggest barometer of the market could turn out to be Tridel’s 75-storey Ten York project, slated for Toronto’s waterfront area. The launch of the tower, which could house up to 795 units, has been delayed until late September, but only because of design and approval issues, says Tridel vice president Jim Ritchie.
“We’re still on,” says Ritchie, who stresses he’s not seeing a softening of prices, just what may be a return to a more normal levels of new condo sales — some 15,000 to 17,000 units per year, rather than last year’s stratospheric 28,000 new condo sales.
“There’s unbelievable speculation going on. Everyone’s looking under a microscope like they’ve never really done before. But of course everything is going to pale in comparison to last year.”