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News

Toronto Market Report August 2022

By

Joey Mirelli

Posted in Market Updates On Aug 11, 2022
Toronto Condo Market Report August 2022

Sales Commentary

Can this market get any slower? Sales for July on TRREB were 4912 units. This was down 47% from July of last year, but more importantly to market watchers, down 24% from June. This marks four consecutive months of sale decreases. If there is a sliver of hope, ‘active listings’ for July are 5% lower than June, even with weaker sales. Yes, prices are falling back to 2021 levels (see our tables below) with a decrease of about 15% so far. Not all sellers are desperate to sell and many are just taking their properties off the market and will wait for prices to recover.

There are a significant number of buyers on the sidelines – both end users and investors. All are waiting for the market to bottom out. No signs yet, with another round of Bank of Canada increases scheduled for September. Our ‘yield curve’ (which tracks interest rates across various term periods) has turned negative meaning short term interest rates are higher than longer term rates. Usually, it is the reverse. This is a sure sign that we are heading for a recession. When it comes, look for the Government to move quickly. They have no more room for spending so look for them to pause any more interest rate hikes and to make changes to the mortgage rules – reducing the stress test, longer mortgage amortizations, etc.

HOW THE MARKET HAS CHANGED IN FIVE MONTHS

ALL OF TORONTO

2022 STATS FOR ALL OF TRREBAll of Toronto Sales Activity 2022

Source: Toronto Regional Real Estate Board


DOWNTOWN CONDOS

2022 STATS FOR 416 CONDO APARTMENTSAll of 416 Condo Sales Activity 2022

Source: Toronto Regional Real Estate Board


TRACKING PRICES IN THE CONDO MARKET FROM 2017-2022

Everyone said the small condo market would crash, so here we are today.

The condo we tracked is a 571 sq.ft., one parking, and a balcony in Liberty Village.

Available now: only one unit – Listed at $668,000
Last sale: June of 2022 (after market correction) – Sold Price $660,000
Second Sale in May of 2019 – Sold Price $550,000
First Sale in September of 2017 – Sold Price$428,000

Draw your own conclusions but it looks like a safe investment to us. For investors, renting at $2400 per month will still only produce a cap rate of 3.2% (after condo fees and property taxes).

Source: Toronto Regional Real Estate Board

RENTAL COMMENTARY

The rental market continues to go in the opposite direction to the sales market – hot.

Our condo rental market consists of the Downtown and Humber Bay Shore markets combined. In July there were over 2,700 units leased. That is 8% higher than the previous month. Starting in August, here were only 1,100 units available to lease. Last month the List to Lease price was from 101 to 102%. In July this number was 102 to 103%.

AVERAGE RENT IN JULY 2022

Average Rent in JULY 2022

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