January results are out from the Toronto Real Estate Board and we have yet to ‘Crash and Burn’ as MacLean’s Magazine and other predict. Sales were only 1.3% lower than January of 2012. Yes, new listings were up and overall condo sales were down in January over last January by 5.1%. But overall sales in January were higher than in December which was a reversal from last year where December sales were actually higher than in January of 2012.
Looking at the downtown condo market – the supposed epicentre of the coming Canadian market crash, condo sales were down by 7.8% compared to January of last year. That compares more favourably than the 20 to 30% monthly declines on a year over year basis experienced in the fall market. Listings were also up by 11.2%. While naysayers will jump on a sales-to-listing ratio of 19% this January – it was only 22% a year ago. While condo sales on the Etobicoke Waterfront in January matched those of a year ago, the number of active listings doubled as registration took place for both the Nautilus and Beyond the Sea condo projects. While the first two weeks of February produced disappointing results, sales were off by 14.4% from the same two weeks of 2012, we can chalk most of that up to a difference in the winter weather. House hunting and buying is an easy activity that can be postponed for a week or two. So let’s wait for March and the spring market before we pass judgment on the condo market.
What we can tell you is that there are plenty of buyers in the market right now. The problem or challenge is that these buyers expect a price discount from the sale prices of last summer. On the other hand, sellers still expect to get the same prices as last year and are not accepting anything less. Who will be the first to blink?
This month we examined sales at 18 Yorkville (at Yonge), a condo building in the priciest area of downtown Toronto. The first unit we tracked was a one bedroom with parking and locker at just 546 sf. With hardwood floors and 9 and 10 ft. ceilings, it has curb appeal. It sold in April of last year at $437,000 in just 21 days. The price just over $800/sf. The same unit sold first in 2005 as new at $277,000 and then again for $410,000 in 2010. Hence most of the price appreciation happened before the Financial Crisis of 2008/2009. In the last two years the unit has only appreciated by just over 3% per year. The second unit we looked at was a two bedroom, two bath unit with a locker and two parking spots. It also sold in 2012 for $685,000. The unit is 803 sf and when you eliminate the second parking spot, the price was $750/sf. The very same unit sold in 2009 for $588,000 for a price gain of 5% per year. So are prices dropping in this building for 2013? Currently there are only two units for a sale. A one bedroom is listed for $449,000 without parking, or $750/sf. A small two bedroom is listed at $615,000 with a single parking spot, or $800/sf. If you expect sales to take place at 3% below list price, then prices in this building have softened slightly but are still over $700/sf!!
Rental volumes were strong with 350 one bedroom units and 175 two bedroom units being leased downtown in January. A sign that demand for downtown living remains high and that many still prefer to rent at this time. Rental prices remain unchanged from the levels reached in late fall. Usually the winter produces the lowest price point of the year. Studios rent from just over $1400 on average. A basic one bedroom without parking averages just under $1700. The one bedroom with den and parking will cost $1900. Two bedrooms start at $2200 and can go up to $2900 with a den and parking on average. Three bedrooms, if you can find one, will average over $4,000 per month. It will be interesting to see how the peak of the rental market unfolds in the May to September period.