SALES COMMENTARY
2020 REAL ESTATE PRICES
Most people use average prices because it is easy. But the problem with average prices is that it assumes the mix of sales does not change which is impossible. For example: if more, cheaper-priced properties start to sell (even if their prices are rising), then the average price will fall.
October showed 10,500 sales on TRREB. This was down about 5% from September but still up 25% from October a year ago. The delayed spring market continues with year-end sales expected to reach 92,000 units – the same volume as 2014 and 2017. We are still short of the record sales of over 100,000 which were achieved in 2015 and 2016. ‘New’ listings for the month were also up by 36% with ‘active’ listings up 13%. You can expect any further price increases to slow or disappear.
These numbers of course reflect the overall market. The condo market and particularly the downtown condo market continues to under perform the overall market. In 2019 year-to-date condo sales represented 27% of all sales on TRREB. For 2020, the percentage was 23.
Downtown and Humber Bay condo sales were 10% lower in October than for October of 2019. In terms of listings, both ‘new’ and ‘active’ are more than double the supply of last year. The sale-to-new listing ratio now sits at 30%. – in favour of buyers. Last year the ratio was 60%.
The weakness in the condo market can also be analyzed by price. People buying condos in 2020 want bigger, pricier units.
YEAR-TO-DATE CONDO SALES BY PRICE
source: Toronto Real Estate Board
Most people use average prices because it is easy. But the problem with average prices is that it assumes the mix of sales does not change which is impossible. For example: if more, cheaper-priced properties start to sell (even if their prices are rising), then the average price will fall.
TRREB uses a Home Price Index which adjusts for property type, size, and location. It is much more accurate. The latest stats track these prices over the last twelve months from October of 2019. It is possible that prices rose then fell over the period, yet prices are still higher – i.e. Downtown Condos.
YEAR-OVER-YEAR PROPERTY PRICE CHANGES USING HPI
With COVID-19, price not location is the primary reason for increased demand by
Regionsource: Toronto Real Estate Board
RENTAL COMMENTARY
While Downtown condo sales declined in October by 10% from October a year ago, the opposite is happening with rentals. In October, we saw 2,200 properties leased. That is an 80% increase over October of 2019. It is also close to the number of leases for September which is usually the busiest month of the year.
In terms of the rental mix, the largest segment was one-bedroom units at 58%. Studios were the least popular at only 2% of the total properties leased. Surprisingly, 5% of all units leased were ‘furnished’.
While rental prices have dropped, the rental market remains active. It will be interesting to see what happens when a viable vaccine is introduced to the market.