ducati0000
Active Member
your comparing apples to oranges here....houses arent becoming a rarity affordable ones are.....
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Condo market slows down in GTA?
- Thread starter maryamhassani
- Start date
neuhaus
Senior Member
Sales of new & pre-construction condos are definitely slowing down. Ask any expert.
Kenny
Active Member
If you're going to wait, you may as well wait 5 years. If there's a "correction", prices won't be rebounding for a long time.
livingrealty
New Member
In my opinion, if you are not in a rush to buy because you need a place to live, I would enourage you to wait at least 1 year. Demand for condos have really dropped in June and investors are beginning to cash out as evident by the increase in new listings. We are expecting record high active resale listings and unabsorbed new condo units in 2012 and 2013, so somethings got to give.
interested
Senior Member
But average resale is $500-550/sq.ft. so are you suggesting that prices will not increase and the new product that will come to market will be at these rather than the $550-700/sq.ft. that people have paid over the past 2 years for product?
livingrealty
New Member
I don't know whats exactly going to happen as it will be the builders call whether to adjust prices or not, but I think this is a very critical moment in Toronto as we have seen a sudden decline in demand for Condos while supply continue to rise. If this trend continues, we could see some downward price adjustments in 2013.
I am also seeing a longer Days on Market trend (Even though TREB's Ave DOM is about 30 days, I don't think these are correct, as listings usually get signed for 60 days and get "renewed" at 61 days or even before. A home that sold with 30 DOM on TREB , could mean 90 DOM or more). They really need to fix this as it is terribly misleading!
I have somewhat of a different view on detached homes though as this market has not shown the same signs as Condos.
James
Senior Member
I think the condo market slowdown is exactly that, a slowdown. Condos definitely do appear to have been listed for longer before being sold and most of the condo sell prices are below asking, but not anywhere near what some people are figuring. Typical sell prices for a downtown condo are about 95% (very rough approximation) of asking. Factor in that the asking price has been inflated by 10% (minimum) and more, you really don't have an absolute decrease in value. I think prices will tail off and stabilize but unless there is a mass exodus out of Toronto proper, I think condo prices will level off for a while.
Single detached homes in the 416, on the other hand, is a different story. Although the number of listings appear to have decreased, asking prices are still very high. Without tabulating all the data, I observe many homes selling for less than asking and others staying on the market slightly longer as well. I'd expect this similar trend follow through into the autumn. After the winter season, though, once 2013 rolls around, who knows?
Single detached homes in the 416, on the other hand, is a different story. Although the number of listings appear to have decreased, asking prices are still very high. Without tabulating all the data, I observe many homes selling for less than asking and others staying on the market slightly longer as well. I'd expect this similar trend follow through into the autumn. After the winter season, though, once 2013 rolls around, who knows?
LostinTO
New Member
Given the current/impending 416 condo market, along with your estimates below, what would be the threshold (% below listing) for a "low-ball offer" to be considered offensive?
James
Senior Member
Take this article with a grain of salt, but the Star had a piece yesterday about how we are transitioning into a buyer's market:
http://www.moneyville.ca/article/1223395--toronto-condos-finally-a-buyers-market
Toronto condos: Finally a buyers market
By Susan Pigg | Sun Jul 8 2012
As far as realtor Andrew la Fleur is concerned, June was a happy turning point for downtown Toronto’s cooling condo market — buyers started edging back into the driver’s seat.
It’s the first time in six years, other than a brief few months when the condo market stalled during the Great Recession of 2008/09, that it hasn’t been a seller’s market, says la Fleur after analyzing Toronto Real Estate Board sales and listings statistics released this week.
“Buyers: Time to Smile,” la Fleur told clients in his blog Friday. “With listings growing and sales falling, the deals will be out there if you know where to find them.”
“Sellers: Time to Get Serious,” he warned. “Gone are the days where anything will sell at any price.”
But for how long?
Housing experts are being cautious about TREB’s June numbers which show condos sales dipped 20 per cent in the 905 regions last month compared to June, 2011, and 18 per cent in the City of Toronto.
The more telling statistic, says la Fleur, is the sales to listings ratio — basically, the absorption rate — which is lower than last year and has been trending towards buyer’s territory since March.
He anticipates prices should start to decline — although not too dramatically — come the fall.
“There are still bidding wars, but there are also a lot of listings that aren’t selling,” adds realtor Brian Persaud. “But last year was a crazy year, so I think we’re just going back to a more traditional market where things slow down in summer.”
While the year started out unusually strong for new condo sales, things have fizzled considerably since March and at least three developers have put projects on hold. It’s still unclear how big a damper tighter mortgage lending rules will add, especially for first-time buyers, when they kick in July 9.
The biggest barometer of the market could turn out to be Tridel’s 75-storey Ten York project, slated for Toronto’s waterfront area. The launch of the tower, which could house up to 795 units, has been delayed until late September, but only because of design and approval issues, says Tridel vice president Jim Ritchie.
“We’re still on,” says Ritchie, who stresses he’s not seeing a softening of prices, just what may be a return to a more normal levels of new condo sales — some 15,000 to 17,000 units per year, rather than last year’s stratospheric 28,000 new condo sales.
“There’s unbelievable speculation going on. Everyone’s looking under a microscope like they’ve never really done before. But of course everything is going to pale in comparison to last year.”
http://www.moneyville.ca/article/1223395--toronto-condos-finally-a-buyers-market
Toronto condos: Finally a buyers market
By Susan Pigg | Sun Jul 8 2012
As far as realtor Andrew la Fleur is concerned, June was a happy turning point for downtown Toronto’s cooling condo market — buyers started edging back into the driver’s seat.
It’s the first time in six years, other than a brief few months when the condo market stalled during the Great Recession of 2008/09, that it hasn’t been a seller’s market, says la Fleur after analyzing Toronto Real Estate Board sales and listings statistics released this week.
“Buyers: Time to Smile,” la Fleur told clients in his blog Friday. “With listings growing and sales falling, the deals will be out there if you know where to find them.”
“Sellers: Time to Get Serious,” he warned. “Gone are the days where anything will sell at any price.”
But for how long?
Housing experts are being cautious about TREB’s June numbers which show condos sales dipped 20 per cent in the 905 regions last month compared to June, 2011, and 18 per cent in the City of Toronto.
The more telling statistic, says la Fleur, is the sales to listings ratio — basically, the absorption rate — which is lower than last year and has been trending towards buyer’s territory since March.
He anticipates prices should start to decline — although not too dramatically — come the fall.
“There are still bidding wars, but there are also a lot of listings that aren’t selling,” adds realtor Brian Persaud. “But last year was a crazy year, so I think we’re just going back to a more traditional market where things slow down in summer.”
While the year started out unusually strong for new condo sales, things have fizzled considerably since March and at least three developers have put projects on hold. It’s still unclear how big a damper tighter mortgage lending rules will add, especially for first-time buyers, when they kick in July 9.
The biggest barometer of the market could turn out to be Tridel’s 75-storey Ten York project, slated for Toronto’s waterfront area. The launch of the tower, which could house up to 795 units, has been delayed until late September, but only because of design and approval issues, says Tridel vice president Jim Ritchie.
“We’re still on,” says Ritchie, who stresses he’s not seeing a softening of prices, just what may be a return to a more normal levels of new condo sales — some 15,000 to 17,000 units per year, rather than last year’s stratospheric 28,000 new condo sales.
“There’s unbelievable speculation going on. Everyone’s looking under a microscope like they’ve never really done before. But of course everything is going to pale in comparison to last year.”
James
Senior Member
To be honest, in my experiences of buying and selling, there is no lower limit, however you do need to have an idea what that property is worth. You will need to bring up a list of comparables before you can determine what a reasonable low offer might be. One thing I've learned over the years is that you need to set a budget in your head and stick to it. Be ready to walk away if the seller isn't willing (or gives you the perception that they are not willing) to budge.
W. K. Lis
Superstar
With the new mortgage rules (80% instead of 85% of the value could be mortgaged, and amortization over 25 years instead of 30 years), I expected a slowdown, not just in the GTA, but all over Canada.
metroTO
Active Member
I believe quality properties in good locations will continue to do relatively well.
I hope this slowdown will weed out developer-type pre-con condos selling in the $600-700/sq.ft. range. These units serves no benefit to end users and only makes the issue of affordable homeownership even worse.
I hope this slowdown will weed out developer-type pre-con condos selling in the $600-700/sq.ft. range. These units serves no benefit to end users and only makes the issue of affordable homeownership even worse.
interested
Senior Member
I think you can count on this happening metroTO.
Developers rushed to market many projects. There is not enough demand for all of them to get built. Some have already been shelved, delayed, postponed or cancelled.
Location will be key.
Investors I believe are waking up to the fact that at $600-700/sq.ft. for mid range product there is no market to sell at a profit in the near future (3-5 years) and that rents don't make sense.
As investors leave that will put further downward pressure.
I would think end users will be exercising more judgement and will be buying assignments between the cost paid and the present $600-700/sq.ft. ( perhaps $550-650 range) with the resale going at $500-550 range.
So, in summary, demand will be decreased. People whether end users or investors will have more choice to not buy both "dog units" and "poorer buildings". Good quality location will still sell but whether it continues at the current prices remains to be seen.
interested
Senior Member
There may be some articles but prices are still going up. This will come to an end soon but in general unless the seller is really worried, the psychology has not changed yet in the majority of sellers minds. To get "low offers" accepted (unless the vendor is in trouble) you will need to wait a while longer. I liked the suggestion by one of the realtors who said if possible wait for a year.
If not, you can try 10% below ask but make sure that you think it is an inflated ask. If you were the seller, have you read enough to say that the $400K condo (if that is true value and not priced at $420K...inflated) would you accept based on what you are seeing today $360K. I do not believe things are at that point yet. One might take $380K to get out but I doubt one would accept $360K at least not yet. Again, the issue is if you really want the property ticking off the seller with a real insult just emboldens him to dismiss you out of hand and if you go back with a reasonable offer he will figure you are hooked to buy (rightly or wrongly) and hold out for a higher price than you might have gotton had you lowballed but not overly so.
That said, given there are more listings coming up, unless you wish something very unique, you can just go on to the next property. However, your agent will likely get upset if you keep going with lowballs "way below" market value.
js97
Senior Member
Those are really excellent measures to help your decision making.
additionally, if you have to figure out why you want to purchase:
Is it for the purposes of an investment
or a place to call home.
If it's the latter, then you might want to bite the bullet and buy - at the risk of paying a premium for a place you call 'home'.
But if it's for the purposes of an investment, then you have to look very closely at the asset you are purchasing, and the potential returns. There are far more lucrative and risk-averse investment properties then what you can buy in TO. Look in Florida/Orlando etc.