It's pretty clear that condo prices have been rising steadily throughout the year. Let's look at some real numbers.
We're hitting the tail end of 2019 and while there is still plenty of time left in the year and plenty of deals left to be done, this sudden freezing cold weather and blast of snow has got me thinking about Christmas already. Plus, when I leave my place for post-work showings with clients and it's pitch black by 5:30pm, it kinda makes me want to hibernate until the Spring. But alas, I've still got a lot of hustle left to do before 2020 starts knocking on the door!
At the beginning of 2019, it was clear the Toronto housing market in general was going to be off to a strong start. The freezing start to the year kept sellers from listing their properties until later than usual, which only meant the pent-up demand from buyers was going to come out in full force when those listings finally hit.
This was especially true in the "entry-level" component of the market, which is and always will be condos. The Spring market was as expected - bidding wars on just about everything that came to market and all-time highs for prices.
Even the east-side, which is where I tend to push clients when they're looking for value started to see "King West" sale prices, meaning money was flowing throughout the downtown core and somewhat closing the gap between prices West of Yonge compared to East of Yonge.
If you watched the market as closely as I do (I'm addicted to it, I admit), you would have seen prices rising month over month right from last fall and into January. That condo that sold for $525k in December 2018? Surely it would have hit $550k by April 2019. And while some of this can be attributed to the typical Spring market frenzy, it just felt like the condo market was strong enough that this would carry over through the rest of the year.
Over the past couple months, I would tell condo buyer clients (either new clients or clients who hadn't found what they were looking for earlier in the year) that prices were up "somewhere around 0.5% per month since the start of the year". This was based on my own analysis on different neighbourhoods but also because it became evident that looking at sales figures from March and April from this year no longer gave a reliable indication of what a similar unit would sell for in September. In fact, even sales from July of this year were looking like relative bargains after seeing how brisk the Fall market was starting off.
But could it really be true? Has the condo market really been appreciating at 0.5% per month? TREB published a year-over-year average price increase for "416" condos of 9.6% for October, so it's not far off.
Let's dig a little deeper. I wanted to really do an apples-to-apples comparison of near-identical units to really get a sense of where the market has gone over the past 12 months or so, and to see if my gut-feel for prices was still on the money. So I pulled a few examples, and while this is in no way exhaustive, these are indisputable sales figures that I personally find more useful than TREB's year-over-year average stats.
Oh, and TREB has rules against publishing sale prices in a public forum, so I'll have to block out part of the exact unit numbers:
224 King St W:
- Unit #2_02 - sold for $546,000 on Oct 23rd, 2018 - 450 sq ft 1-bed/1-bath
- Unit #3_02 - sold for $568,000 on June 12, 2019
- Unit #3_02 - sold for $590,501 on July 23, 2019 with a locker.
From Oct 2018 to July 2019, that's an 8.1% increase in price over 9 months (ignoring the value of the locker). These are identical units on different floors.
33 Lombard St:
- Unit #2_02 - sold for $610,000 on April 2nd, 2019 - 589 sq ft 1-bed/1-bath with locker
- Unit #2_02 - sold for $660,000 on July 23rd, 2019 with no locker.
From April to July 2019, that's an 8.2% increase over just 3 months! Could be an outlier? We'll have to see when the next unit comes up for sale.
88 Scott St:
- Unit #2_02 - sold for $790,000 on May 24th, 2019 - 743 2-bed/1-bath with parking/locker
- Unit #2_02 - sold for $860,000 on Sept 25th, 2019, also with parking/locker
- Unit #2_02 - sold for $870,000 on Nov 14th, 2019, also with parking/locker
From May to November 2019, that's a 10.1% increase in 6 months. These are all the same layout on different floors.
168 King St E:
- Unit #8_4 - sold for $680,000 on Nov 27th, 2018 - 790 sq ft 1+den/1-bath with parking/locker.
- Unit #6_4 - sold for $741,000 on May 7th, 2019, with some upgrades
From November 2018 to May 2019, that's a 9% increase over 6 months.
400 Adelaide St E:
- #2_08 - sold for $628,000 on March 26th, 2019 - 650 sq ft 1+den/2-bath with parking/locker
- #1_12 - sold for $661,500 on Oct 23rd, 2019, also with parking/locker
From March to October 2019, that's a 5.3% increase in 7 months.
1 The Esplanade:
- Unit #2_05 - sold for $568,200 on April 25th, 2019 - 531 sq ft 1-bed/1-bath
- Unit #1_05 - sold for $585,000 on Sept 13th, 2019
- Unit #3_05 - sold for $622,000 on Sept 21st, 2019
From April to September 2019, that's a 9.5% increase in 5 months.
60 Colborne St:
- Unit #3_8 - sold for $462,000 on April 8th, 2019 - 461 sq ft studio
- Unit #3_4 - sold for $462,000 on July 5th, 2019
- Unit #5_8 - sold for $515,000 on Sept 6th
From April to September 2019, that's an 11.5% increase in 5 months.
1 Scott St:
- Unit #3_10 - sold for $405,000 on Dec 16th, 2018 - 345 sq ft studio
- Unit #1_10 - sold for $485,000 on Nov 4th, 2018
From December 2018 to November 2019, that's a 19.7% increase over 11 months.
1 Market St:
- Unit #2_02 - sold for $683,000 on Dec 13th, 2018 - 671 sq ft 1+den with parking
- Unit #2_02 - sold for $747,500 on Sept 11th, 2019, also with parking
From December 2018 to September 2019, that's a 9.4% increase over 9 months. Same unit on different floors.
112 George St:
- Unit #4_8 - sold for $635,000 on June 18th, 2019 - 656 sq ft 1+den with parking/locker
- Unit #8_5 - sold for $660,000 on Aug 12th, 2019, also with parking/locker, slightly better view
From June to August 2019, that's a 3.9% increase in 2 months (without taking into account the view)
21 Grand Magazine St:
- Unit #4_5 - sold for $610,000 on May 15th, 2019 - 721 sq ft 1+den with parking/locker
- Unit #3_8 - sold for $627,000 on Sept 19th, 2019, also with parking/locker
- Unit #3_7 - sold for $645,000 on Nov 7th, 2019, also with parking/locker
From May to November 2019, that's a 5.7% increase over 6 months.
18 Stafford St:
- Unit #6_3 - sold for $655,000 on March 29th, 2019 - 742 sq ft 1+den with parking/locker
- Unit #9_2 - sold for $685,000 on Nov 4th, 2019, also with parking/locker
From March to November 2019, that's a 4.6% increase over 7 months.
I could obviously go on and on but I think you see the point. Price increases are certainly not uniform but it's hard to argue with the strong overall appreciation that the core has seen over the past 12 months, and even just within 2019 itself. Whether it's 0.5% per month, or 1%, or 0.25%, there's no denying the fact that there continues to be upward pressure on prices, particularly at the lower end of the price ladder.
Keep in mind that there are always outlier sales - ie, a buyer who "went crazy" and blew away any comparable sale, but the market seems efficient enough to not fall for these false indicators, and subsequent sales are more in line with the overall trend.
When will it end? I get asked that a lot.
Considering a 1-bed unit one of my clients was interested in last week received 3 bully offers over the weekend, and the fact that almost all my condo buyer clients this year have ended up facing multiple offers, and the fact that offer dates are still the norm well into November, I don't see things slowing down substantially any time soon. Also remember that not every buyer looking this fall will be successful before the end of the year, I can only imagine this demand will carry forward into 2020.
But time will tell.
Have you checked out my previous blog posts?
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Your Toronto condo lover,
iPro Realty Ltd, Brokerage
Direct: 647-223-1679 (call/text)