One of our Condo Pros recently helped a client sell their Liberty Village condo for around $700,000, a property they had purchased last year for around $500,000. The client moved out to Mississauga where they could afford greater square-footage and a loftier lifestyle. With many current condo owners experiencing sizable capital gains in the range of $100-200k, we think that this spring offers a valuable opportunity to sell your condo, regardless of the market mood swing from the crazy winter we experienced.
Of course, we understand the inclination to wait and see how far the prices continue to rise. But that can be a dangerous game to play. Already, the market is beginning to normalize. The new Ontario government legislation seems to have put a slight pause on buyers, but the market has also seen an influx of new spring inventory, though it’s come a bit later than expected. The new inventory has given buyers more choice, spreading out the demand and limiting the occurrence of bidding wars. That being the case, average selling prices for condos in Toronto appear to be levelling out.
Change in price increases for Toronto condo market
Based on Condos.ca PSF Index data, the current average condo price in Toronto is around $665 /sqft or $580,000. When you look at the percentage price increase for the last 60 days, however, it is clear that the Toronto condo market is starting to normalize.
This graph indicates that although Toronto condo prices are continuing to show percentage increases, the rate at which prices are going up is slowing down. The trend-line is clearly on a downward slope. The Ontario Fair Housing Plan impacted the market on April 20, but the downward trend was already in motion by late March/early April. As a condo owner, you could choose to focus on the continued price increases, because they are still growing; however, you may want to consider where this downward trend is heading. For those thinking about selling, now might be a smart time to act.
The Toronto condo market is slowing down, but price gains year-over-year are still significant.
The Toronto condo market year-over-year gains are still reaching a 30% increase, whereas freehold houses in Toronto were up 24.5% in April, according to TREB. This combination of huge gains and a normalizing market is making spring 2017 a unique time to sell your condo in Toronto. There is never a definite best time to sell a condo or house, but the spring does have its benefits.
Toronto condo market looks good in spring
Spring is a great time to “showcase” your home. The air is ripe with a fresh, movable feeling. Trees and wildflowers are blooming. The sun feels extra warm and bright. With the right staging, there is an undeniable advantage in the springtime to bring out the beauty of your home. Buyers are also often more favourable towards purchasing in the spring.
Once the summer hits, selling a home will become more challenging. The buyer pool in the summer months dries up. Fewer people will want to buy a new home and then physically move into it (moving out of an old one at the same time), largely because the summer heat makes it less enjoyable. For many Canadian families, the summer offers a small window of relaxation and enjoyment that must be seized. Kids are home from school, parents want to enjoy a few weeks of solid relaxation, and the ‘big-purchase mindset’ is geared more towards taking a vacation than buying a home.
While selling in the summer still happens all the time, homebuyers are statistically more active in the spring and that makes it easier for sellers. In May and June 2016, our Market Report tracked a total of 4,781 condos sold in Toronto, a number that dropped to 4,243 in July and August. That’s a difference of 538 sales (or an 11.25% drop). Heading into May 2017, condos listed in the $500k to $700k range are spending around 40 days on the market.