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Mansions move slowly, condos pop as Toronto enters spring buying season
A ONE-BEDROOM condo plus den listed at C$648,000 (S$656,860) in Toronto's East End has been sitting on the market for weeks. A similar unit in the same building priced C$69,000 cheaper ended up selling way over the asking price.
Whether it's an apartment in a glitzy new skyscraper or a mansion in exclusive Forest Hill, pricing has become paramount as Canada's biggest city heads into the busy spring property season.
As the market stabilises after a year of plunging sales, condo sales are a mixed bag and big detached homes are hard to shift.
Real estate agent Justin Wu, who's handling the condo that's still on the market, said: "The right product, in the right location and at the right price will get lots of interest and likely, multiple offers. Others take more work to sell."
Home sales in the Toronto region have dropped 37 per cent from their peak in 2016; prices are down 4.4 per cent since maxing out at C$815,200 in May 2017.
Resale condo listings swelled about 10 per cent in the first quarter from the same period last year, according to research firm Urbanation.
Housing across the country has been adjusting amid tighter mortgage regulations, taxes on foreign buyers and other measures designed to curb runaway prices and household debt, particularly in Vancouver and Toronto.
While Vancouver's market is still sinking, an influx of about 100,000 immigrants a year is providing an underpinning in Toronto, especially for condos.
Shaun Hildebrand, president of Urbanation, said: "The price differential between the average price of a condo apartment and a low-rise home has narrowed to its lowest level in four years, which is creating more supply competition for condos and sparking some move-up buying."
For first-time buyer Adam De Biasi, 24, getting into the condo market was a totally nerve-wracking experience.
"Every delay I had, another condo would slip through my fingers," the engineer-in-training said.
He felt if he didn't get into the market he'd be living in a "shoebox" by the time he was ready to move out of his parents home.
After months of searching - and losing out - he finally landed a one-bedroom in a presale project launched by Menkes Development north of Toronto that met his budget of about C$400,000. It's right by the subway line and near the highway.
His agent Simeon Papailias said Mr De Biasi got lucky. The sales office was "mayhem" as buyers and agents begged for units in that pricing sweet spot.
That same week, Mr Papailias went to another presale condo launch by CentreCourt and SmartREIT, which sold out in three days. He had to weave through almost 3,000 agents competing for 490 units.
"The minute anything launches - C$800 per square foot - and connects to Toronto by subway, there is a complete frenzy," he said.
Single-family homes are a different story. Prices across the city were up just half a per cent in March from a year ago, with a 7.2 per cent rise in condo prices.
Mark Mandelbaum, chairman of Lanterra Developments, said: "There is a big challenge with low-rise, which is still suffering a lot. Even resales in established areas are a bit slower - I think it's going to change, but right now, it is a bit slower.
"With a condo, if you don't like it, you can rent it. It's very hard to rent a house in Markham." (Markham is a city about 30 km to the north-east of downtown Toronto.)
Mattamy Homes, the biggest private residential home-builder in North America, has seen hot demand for most of its single-home property launches, said its founder Peter Gilgan.
"Every one of those launches, priced properly, is sold after a day or two," he said in a February interview. Many of the projects are outside the Toronto core.
Great Gulf Group also launched a Whitby, Ontario, project this month, which had steady queues outside its sales centre and sold out, said its spokesman Madeline Zito.
As for Mr Wu, the agent who's still waiting for takers on his unit in the city's east end, it simply means having to put more work in. "This is very different from a couple years ago, when it was pretty indiscriminate buying across the board", he said. BLOOMBERG