A new survey finds that more than half of condos sold in the Greater Toronto Area (GTA) are being listed for below-market prices, a trend that’s becoming more common as the GTA’s housing market continues to recover.
According to data released Tuesday by real estate agency CBRE, nearly half of all condos sold between April 2018 and March 2019 are being sold at below-listing prices.
That’s an increase from less than one in 10 sold between March 2018 and April 2019.
“The GTA has been struggling to recover from the recession.
A lot of condo sales have been going to below market prices and those below market values have been decreasing, but the number of condo listings for below market is still going up,” said Matt Haines, senior vice president at CBRE.
“We’re seeing that trend continue and we’re seeing it accelerate in the GTA.”
According to the latest CBRE report, the GTA saw nearly 1.4 million condo sales in 2019.
That was an increase of 0.8 per cent from the previous year.
That means that there were nearly 4,500 condo listings that were priced below their listings price at the end of March.
Haines says it’s not just the market in the Toronto area that’s changing.
He says other cities in Canada are experiencing similar trends.
“When you’re looking at the GTA, I think that there’s an increased focus on luxury condos and condominiums as well as detached homes as well,” Hain, who was not involved in the survey, said.
“In the GTA you have a lot of condos that have been listed at below market for quite a while and those condos are going up.”
Accordingly, there are more than 50 condo sales a day in the region, including many that have not yet been sold.
This has led to some of the most expensive listings ever recorded, with a $7.6-million condo being sold last week for a mere $4.5 million.
“It’s very rare that you see the price of a condo going for that much.
You’re looking for a price where you can sell for more than the market value of the condo,” said Hain.
According to Hain and other real estate agents, this trend is expected to continue.
“In the next few years, condo prices will continue to go up and condo values are going to continue to rise,” said Paul Leblanc, director of research at CBre.
“I think condo values will continue the upward trend we’re starting with in other areas of the GTA as well.
We expect condo values to continue going up and it’s going to be quite a bit more affordable for people to live in.”
According To Leblac, the rising condo prices in the Metro region are not just a problem for the people who live in the neighbourhood, but also for people who work in the city and people who visit it from time to time.
“They’re not going to live like a luxury condo and they’re not even going to have the luxury amenities,” Lebloc said.
“I think what’s going on is it’s creating this market for condos, which are actually not a good investment for many people.”
Despite the high-end condo sales, the real estate market continues not to be the same.
According the CBRE survey, there were 1,857 condo sales last month in the metro region, an increase over the 1,636 condo sales that took place in the first six months of the year.
There were also 1,942 condo sales on the other side of the country, a decrease from the 2,009 condo sales recorded in the same period in 2017.
According To Hain at CBRe, the region has seen condo prices go up by an average of 9 per cent each month since September 2018.
But that doesn’t mean people are going out of their way to get them.
“There are people out there who are not getting a chance to buy condos and are getting into condos because they want to take advantage of the price,” Hine said.
The CBRE data does show that there are fewer condos on the market compared to last year.
The average price of all condo sales was $3.75 million in the month of March 2018, down 6.5 per cent compared to $3 million in March 2019.
However, this still represents a decline from the peak price of $5.9 million recorded in December 2017.
The number of condos being listed in the U.S. also has been on a downward trend.
In January 2018, there was a peak of 7,094 condos being on the marketplace.
That number was surpassed in February by a total of 4,764 condos sold.
“So I think it’s a matter of whether the condo market is in a downturn or not, but it’s certainly been a very