A return to the old normal
Buyers have more room to bargain
Globe and Mail
August 29, 2008
Toronto real estate watchers are anticipating a brisk fall market in condominium sales but the pace has already cooled from last year's torrid unit-swapping.
Sellers still have the advantage but both prices and sales gains have slowed from last year's record pace, says Jane Renwick, executive vice-president and editor of the Urbanation housing report.
Ms. Renwick says Urbanation is expecting the launch of 24 new condominium projects this quarter in Toronto and the surrounding areas. That would put the city on track for about 80 projects this year, which is approximately the number of new projects tallied in 2005 and 2006.
The 2007 total soared to 104.
Ms. Renwick says the more conservative pace this year is closer to a more historically "normal" level. That slower pace of projects coming on stream means that sales and prices should remain buoyant this year, she adds.
Lee Taylor, an agent with Bosley Real Estate Ltd., has a two-bedroom unit listed at $519,000 in the High Park Lofts building. She says the loft is attracting the attention of house-hunters - buyers are still motivated - but some believe that real estate prices have come down in Toronto.
Over all, the average house price is up 5 per cent in the Greater Toronto Area in August compared with the same time last year, according to recent figures from the Toronto Real Estate Board.
"I don't see [prices] softening. That may just be the perception," she says.
Ms. Taylor notes that there are more condos listed for sale and that makes the market more balanced than it was last year at this time, when buyers significantly outnumbered sellers.
"It's more of a negotiating market. With a little more to choose from, there's a little more opportunity to negotiate," she says.
Proper pricing is even more crucial this year, she adds. In previous years, bidding wars often made the asking price irrelevant.
Ms. Taylor says buyers are still willing to compete for an immaculate property that requires no work, but increasingly people are haggling.
"It's more of a negotiating market. There's a little more to choose from, a little more room to negotiate."
Another factor this fall will be the move by Canadian financial institutions to tighten lending rules as they try to avoid a U.S.-style housing-price bubble.
Starting Oct. 15, the Finance Department will stop guaranteeing 40-year mortgages and mortgage loans with no down payment.
Because many first-time buyers opt for condominiums, that market could see a few people drop out of the hunt, says Ms. Renwick.
"I do think it will keep those marginal buyers out."
Brian Elder, an agent with Royal LePage Real Estate Services Ltd., has a $1.199-million listing in the Yorkville area. The two-bedroom condo has 1,365 square feet and concierge, butler and valet services.
Mr. Elder says more listings will start to come in in the coming weeks.
Sales have been fairly strong at both the low and high ends, he adds. "I think there's still a really strong demand."
Still, August has been sleepy, he points out.
In June, the average number of days on the market for one of his listings was 23; in July the tally moved to 27. So far in 2008, the average number of days on the market is 13 for Mr. Elder. In 2007, his properties were taking eight days to sell, on average.
But Mr. Elder believes buyers are still keen to move out of rental apartments and buy condos and houses."I have pretty high hopes," he says of the fall market over all.