The First Half of January Shows the Toronto Condo Market on Fire
Last year may have left a few marks on the Toronto condo market, but by December’s end, the sector was already coming (back) out swinging.
From November to December, the segment of the city’s real estate world saw major upticks in activity — read: year-over-year increases from 0.8% to 75.9% respectively — and, at the time, industry insiders predicted no slow-down in sight.
Now, the new year is upon us, and while it’s already been established that all of 2020’s stories didn’t totally dissolve when the clock struck midnight on December 31, it would appear as though at least one of them did.
That being the tale of two cities Toronto was living in, where detached, semi-detached, and townhome sales soared, and condo activity sat idle in comparison.
Perhaps it was (relatively) low prices combined with (moderately) low mortgage rates that inspired a return to action in the condo resale market. Or maybe vaccine implementation — and the related promise of some form of normalcy on the horizon — served as the motivator. Or it could be that, after months of hesitancy to jump into the proverbial water, it was simply time.
Whatever the reason, January is proving that last month’s Big Condo Energy is holding strong, as 416 sales have nearly doubled the activity of 2020 on a year-to-date basis.
Jiminy Cricket! Sales for the first half of January are way up on last year – almost double for condos. And remember last year started out hot. Last 3 Jans (1st – 15th):
416 Condos: 350, 429, 822
416 Freeholds: 172, 183, 316
— Scott Ingram CPA, CA (@areacode416) January 17, 2021
Toronto realtor and chartered accountant Scott Ingram shared a visual of the year’s activity thus far on Twitter; the graph shows the month’s condo sales, recorded on January 15, up 92% over those of 2020.
What’s more, Ingram shared exact sales numbers from the same period for the last three years: 350 condos were sold from January 1 to 15, 2019; 429 were sold in 2020, and 822 were sold in 2021, according to the Toronto Regional Real Estate Board’s MLS data.
Meanwhile, freehold sales are cruising comfortably, up 73% year-over-year, and illustrating a three-year growth trajectory of 172 sales in 2019, to 183 in 2020, and finally 316 in 2021.
Indeed, it’s all well and good in the freehold realm, but these homes aren’t putting on a show thats at all comparable to that of their condo neighbours.
“Listings are not building up. In all of 416 there are only 26 more active freehold listings than there were on New Year’s Day. So net-adding less than 2 a day across the whole city,” Ingram said. “I hope buyers don’t get carried away, but I’m already seeing examples.”
Meanwhile, John Pasalis, President at Realosophy Realty, has likewise taken note of the emerging condo market activity, and is beginning to speculate on what it might mean for the sector going forward.
How the year is starting for Toronto real estate.
A few trends that stand out…. 1/ pic.twitter.com/fQqYmgp1yu
— John Pasalis (@JohnPasalis) January 18, 2021
“Condo sales are strong but new listings were also up 66%,” he noted on Twitter. “I haven’t looked at the data closely but I do wonder if some investors are rushing in as others are taking some money off of the table.”
The “investor” suspicion is one that Pasalis, alongside Ingram and Ron Butler — founder of Butler Mortgage — brought to the table earlier this month while reflecting on the condo market’s December happenings. Now, the theory about a surge in investor interest is one that Pasalis describes as “interesting,” with consideration of rental vacancies sitting at a 50-year high; a report that came in just this week from Urbanation.
Still, the numbers, whoever is driving them, speak for themselves.
“Downtown condo prices are still down 7% year-over-year, but up 3.5% in just the past 60 days alone. Last week, one of my agents helping a buyer found himself up against 12 offers on a micro-condo at the new Smart House condos in Queen West. I suspect with vaccines on the horizon, buyers understand that now is the time to take advantage of these lower prices,” says Robert Van Rhijn broker of record at Strata.ca.
And, in lockstep with Van Rhijn, a new report from RBC also points to the prices of condos remaining low, at least for the time-being, as a factor that could help to keep sector activity bolstered through the near future.
“Downtown condo prices still bucked the trend due to ample inventories in Canada’s largest cities—the downturn in the rental market has prompted many condo investors to sell,” the document explains; (a truth that, for those with their ear to the ground through the latter half of 2020, has long been clear).
“Softer condo prices are now drawing more buyers in… We expect condos’ growing affordability advantage over single-detached homes will boost demand in 2021.”
The report’s prediction is echoed by experienced real estate agent Scott Shallow, who believes condo action will really ignite come spring. “With the discount in prices and the interest rates, people will run to the market… It will be one of the wildest markets we’ve seen,” he said.
So far, all signs point to an upcoming bustling moment-in-time for the condo market, with the current action serving as only the beginning. But per Pasalis’ tweet, all we know for certain is “how the year is starting for Toronto real estate.”
To learn the difference between “how it started” and “how it’s going,” we’ll all just have to watch and wait.