Are Condos In Toronto Still A Good Investment
For over 10 years now Investors have realized fantastic returns in the Toronto condo market as prices have steadily increased as the demand continued to outpace the supply of available units.
With the current pandemic and its economic impact, investors are now asking us on a daily basis if we think condos will continue to be a good investment going into 2021 and beyond.
Before we answer that question, let’s first look at some of the data in the current condo market.
· Condos sales in May are down 56% year over year
· Condo listings are down 48% year over year
· Average days on the market is up 20% year over year
· Prices are up 7% year over year but down 2% from the beginning of the year
· Inventory over $600,000 is growing, below $600,000 remains constant.
· Early market indicators for May such as number of showings and the number of offers is all way up for May.
So what does all this mean?
The best way to describe the current situation is that the market is now split into 2 segments. A “balanced market” for condos worth more than $600,000 and a seller’s market for those below $600,000
Condos close to transit, close to the water, split bedroom layouts that can handle more than 1 renters in maintained and managed buildings will always hold their value.
It’s our opinion that this is a very good to purchase a condo without having to participate in a bidding war, especially those condo’s above $600K in value. There are deals in this segment. In the segment below $600K there is more completion on the buy side, so the deals are not quite there yet, but with rent levels still high and short-term rentals now again allowed in Toronto, these prices will likely soon uptick a few percentage points.