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Over the next two months, the annual comparison of the Toronto housing market (see the monthly Statistics section of this report) will not tell us much about the actual situation in the real estate market, as this is the first full month of the shutdown of COVID-19 in Ontario compared with April 2020 a year ago, which also leads to a de facto freeze in the resale housing market. Then, sales were down 67% from the previous year, and the average price was 10% lower than the previous month, because the price range of the houses being sold was much lower.
Instead, based on our understanding of current data and the latest trends, I will share with you the key information you now need to know about the Toronto housing market.
The most important trend now is the beginning of a gradual cooling of the housing market (freestanding, semi-freestanding, row) throughout the Greater Toronto area. The market is still in the depths of the seller’s market, but we see the first signs that the market is starting to slow, which is a welcome sign for buyers involved in a frustrating bidding war.
In the Toronto area, houses that have received multiple offers are still the norm, with 73% of them selling for more than the asking price of their owners (down slightly from 79% last month). But sellers get fewer offers on the night of the offer-in some cases there is no offer at all. Due to the demand generated by Covid-19, the surge in demand we are seeing seems to be in full swing, as April sales are down 12% from March-it is worth noting that as we enter, sales usually do not decline (usually the busiest) spring market. The surge in new shares over the past two months has also helped to eliminate some of the heat in the market.
Most importantly, home prices are no longer accelerating month by month and seem to have been flat over the past few months, with an average price of about $1.3 million.
On the other hand, the apartment market has been accelerating over the past five months and shows no signs of slowing down. Although average house prices have been flat since January, apartment prices have risen 14% from $620K in January to $709k in April.
The inventory level of apartments is still very tight, with 63% of apartments selling for more than the asking price of the owners. However, it is rumored that a large part of the change in apartment demand over the past five months has come from renewed interest among apartment investors, especially in downtown areas (see the “data diving” section of this report). But with apartment prices rising rapidly and interest rates rising slightly, we may see the apartment market begin to cool in the coming months.