Investors have seen great returns in the Toronto condo market over the last several years. Each year prices have increased as the demand for condos far outstripped the supply of available units. Many investors now are asking if condos will continue to be a good investment in 2020?
What’s changed in the condo market since COVID?
- The number of condos SOLD in the month of May is down 56% from the same period last year.
- The number of active listings is down 48% from the same period last year
- It’s taking longer to sell condos with average days on the market now 20 days up 20% from the same period last year.
- Prices are up 7% from the same period last year but down 2% from highs earlier this year
- The inventory of condos for sale priced over $600,000 is growing week over week. The inventory of entry condos below $600,000 remaining constant.
- As Ontario re-opens we’ve seen early market indicators improving each week in the month of May on the number of showings, the number of offers and the number of condos SOLD.
Our thoughts on what this all means?
- We have entered a balanced market of buyers and sellers for condos over $600,000. It’s still a sellers market for entry-level condos below $600,000
- There are fewer bidding wars on condos with many buyers still sitting on the sidelines
- Prices have softened with condos priced over $600,000 from the highs set earlier in the year. Prices are still well above prices a year ago. No one can predict which way prices will move going forward
- The best condos maintain their value and are always good long term investments. This includes condos close to transit, with water views, split bedroom layouts that can work for two renters, lower maintenance fees, boutique buildings, and well maintained and managed buildings.
What are the opportunities for investors?
- CMHC has just announced the tightening of mortgage rules July 1. Purchase before July 1 under existing mortgage rules
- Many condos are now on the market and accepting offers anytime versus on an offer night. This is a great opportunity to purchase a condo without having to participate in a bidding war.
- Take advantage of the softening mid-upper market where the inventory of condos is growing. There are deals in this segment.
The opportunity for investors in the condo market continues to be strong. Not all condos will appreciate at the same rate. Be smart in your selection and work with a realtor that understands the market and how to maximize your investment.