After a couple of years of relative stability, sparse inventory levels are fueling frenzied bidding wars once again and the soaring star is definitely the condo market. The average price for a Toronto condo has risen by a solid 15% year over year to $679k as compared to last January.
So what’s up with this craziness? Is it a return of the runaway prices of Late 2016-Early 2017 ? Well it feels like it but current price gains are not nearly as high as they were back then. This is good news.
Here are a few facts and observations:
1) THERE IS NO INVENTORY – Because December was such a robust month we didn’t experience the usual resurgence of new listings in mid to late January of properties that didn’t sell in the fall.
2) FOMO – Buyers are ferociously bidding on the few available listings and are afraid that prices will be more expensive in the spring. They are right. This is definitely a case of the ‘”fear of missing out” !
3) SELLERS ARE STAYING PUT – Because condo prices have risen so much, baby boomers who would typically downsize from their large homes are often staying put as they realize that a budget of $2m won’t get them a great deal of space.
4) CONDO PRICES/SF – A few months ago the price of a downtown condo was about $1000/SF. Today the list price is $1000/SF and the selling price is $1100-$1200/SF.
4) NEW CONSTRUCTION PRICE/SF – With new construction prices at approximately $1400/SF, prospective Buyers are choosing to purchase existing units. The unknown of what interest rates will be 4 years from now along with exorbitant development charges passed on to prospective Buyers are two factors which are pushing people towards resale rather than pre-construction.
TIPS ON HOW TO NAVIGATE THE MARKET THIS SPRING
DOWNSIZERS – Sell now especially If you are in a position to cash out. People are either choosing to rent or are relocating further outside of the city to enjoy a less frantic lifestyle. The other option might be to buy a smaller more urban home now that the price/SF of a condo is about the same as a semi-detached home or townhouse.
UPSIZERS – “Entry Level” properties under $1m are in high demand. If you already own a condo you can use your equity to upsize. Remember young people … you are in the early stages of your career and your income will be increasing as time goes on. Be smart!
LEVERAGE YOUR EXISTING EQUITY – Keep your existing property and use your equity to buy an investment property. This is a tried and true way of building wealth.
NEW STRESS TEST + FIRST TIME BUYERS – The government has introduced the new and improved stress test whereby lenders will be using the average of the last 4 weeks 5 year fixed interest rate plus 2% to qualify Buyers. In this low interest rate environment, this means that Buyers will have more purchasing power. The new measures become effective on April 6, 2020. This is great news for First Time Buyers who have either stopped looking or given up hope of ever owning a property. Remember that as a First Tme Buyer, you still get a rebate on the Land Transfer Tax and can use up to $25000 of your RRSP as part of the downpayment.
THINKING OF SELLING?
Our team will have your home camera ready in no time. We provide declutter, staging and design consultations, a pre list inspection, professional photos and floor plans, targeted social media marketing and have an efficient support team in place plus 15 years of experience working with Buyers and Sellers in the ever competitive Toronto market. Most importantly we have the unsurpassed power of the Sotheby’s International Realty brand. Need we say more?
Sources: TREB Market Watch + 2020 Market Outlook Report, CREA Housing Stats, Canadian Mortgage Trends, Sotheby’s Top Tier Report
Matching her knowledge of Toronto’s eclectic mix of central core neighbourhoods and impassioned by her diverse mix of buyers and sellers, Kimmé is naturally motivated to create a positive and professional experience. Kimmé does her homework and knows her inventory. She is genuine, honest and a straight shooter. Nor is she afraid to think “outside the box” as she employs creative strategies to make dreams become reality.
Born and raised in Toronto and coming from a successful fashion background in design and management, Kimmé could not have met a better match for her entrepreneurial skills than by working in Real Estate. Inspired by her father, well known Toronto clothier to the stars, “Lou Myles”, she learned from a very young age to work hard and strive for excellence.
Licensed since 2005 as a full time Sales Representative and a Broker since 2016, she continues to be proud to be affiliated with the Toronto office of Sotheby’s International Realty Canada and to be part of the highly respected world renowned global luxury brokerage, Sotheby’s International Realty.
Kimmé has received numerous sales awards throughout her career including the prestigious Gairdner, Diamond and President’s Awards. She has completed extensive negotiation training and is among a select group of realtors in Canada to hold the Master Certified Negotiation Expert (MCNE) Designation and the Certified Negotiation Expert (CNE) Designation. In addition, she is a member of the prestigious U.S. based Institute of Luxury Home Marketing and also carries the Luxe – Luxury Listing Specialist Designation. She holds the SRS Designation – Seller Representation Specialist and the SRES Designation –Senior Real Estate Specialist – both accredited programs through NAR – The National Association of Realtors, USA.
Entrusted with the life choices of her clients, Kimmé is truly honoured to have the opportunity to serve and assist others and does so with integrity, commitment and enthusiasm.
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