05 Oct Market Notes: Condos in the 416 hit an all-time monthly record
This week the sales numbers came out for September, a fairly important month after the downtown market cooled-off slightly over the summer. The summer lull, especially in July, made many professionals in the real estate industry nervous about predicting how the fall market would unfold. Well, the numbers came back strong and in line with my expectations.
Last week I mentioned: “Sales numbers will be strong, showing a competitive market where demand in the 416 continues to outstrip supply. Overall, appreciation should continue to build-off the upward momentum from the spring.”
Overall, that is very close to what happened (see month-over-month sales below). The average selling price in every segment was up in the 416 compared to August, while the 905 stayed relatively flat month-over-month. Buyers came back in September and more than absorbed the new inventory from people waiting or willing to sell. The average sale prices are in line with what we saw in April and June of this spring, but short of the peak in May. The most active seasons are spring and fall.
What is a bit surprising, is how hot the condo market continues to be. The average price of a condo in the 416 is now $615K, hitting an all-time monthly record. Year over year, the average condo has appreciated 11.7%. The big question moving forward is how does the condo market cope with rising interest rates. Are first-time buyers and investors, the segment of the population that dominates the condo market, the most susceptible to rising interest rates?
Condos are usually shorter-term purchases than houses, if rates rise quickly will the owners be able to or want to stay in their units longer? If you are locked into a fixed rate, it may not matter until you have to refinance. Also, the rental market is so strong that renting your unit instead of selling it may be an option.
If you are worried about future values, rising rates and real estate as an investment in general, my advice is to purchase a unique property that will always be desirable or a property you can add value too.
-Nick, Oct. 5/2018
Feel free to contact me for more specific advice on buying or selling downtown.
Nick@livingdifferent.ca – cell/text – 416-890-6126