It’s been a pretty active month in real estate land! The first two weeks of November saw sales activity climb by 8.3% compared to the same period last year.
On the supply side of the market, active listings, which include both houses & condos, were down 5.7% on average from one year ago.
This decline in listings is a subtle hint that going into 2015, prices can only head in one direction, up. It’s also worth noting that sales within the city of Toronto have been stronger than the 905 regions in this the latter part of the year.
As such, we can expect freehold properties in this market to produce significant price gains in the next twelve months. On the flip side, the condo market is showing a more disciplined price balance.
While overall sales in this segment were up by 6.6% in October compared to the same period last year, the downtown market saw better performance with sales up by 9.7%.At the same time, active condo listings in the core were up by 8.9%.
Yes, the supply side continues to grow, but at a reasonable pace that has kept balance with the demand.
Comparing Apples to Apples
This month we analyzed sales at the Vu Condos located at 112 George St. (Adelaide and Jarvis). The building was completed and registered in 2010 and is situated in a prime downtown location close to St. Lawrence Market.
The first unit we studied was a 685 sq. ft. one bedroom plus den, with parking, locker, and a balcony. The unit sold this year for $396,000, receiving 99% of the asking price. That works out to a value of $578 per sq. ft.
The same unit sold four years ago at registration for $335,000. This translates into a price appreciation of 4% per year.
The second unit we compared sold this year also. The specs were as follows: two bedrooms, two bathrooms with parking and a locker. It featured 10 ft. ceilings and a 240 sq. ft. terrace. That unit sold for $520,000, receiving 101% of the asking price. At a total square footage of 812, the price received was $640/sf.
Most units this size sells for $550/sq. ft., suggesting the buyers were willing to pay a $20,000 premium for the terrace component.
This same unit also sold at registration, four years prior, for $442,000, without a parking space. At that time parking could be purchased for $25,000. Doing the adjustments, this condo appreciated at just 3% per year.
Maintenance fees were roughly 55 cents/ per sq. ft. and are considered quite reasonable for a building this age. The popularity of the building is reflected in the minimal sales activity where only 3 units were available for sale out of a building total of 352 units. The average list price is $600/sf.
Rental Market Commentary
We are now entering the slowest period of the rental market. 655 units were leased in the downtown core in October. This figure is 37% lower than the August peak of this year.
Seasonality also applies to the rental market. For tenants, usually the best time to rent is in the months of November and December.
During this slower period, landlords are more open to making a deal, instead of having their units sit empty.
In contrast, the most challenging months to land a unit are April, July and August.
This time of year it’s quite common to see multiple offers and units leased within 7 days of listing.
The average price for studios dropped by approximately $50 to $1400 per month. The one bedroom market remained unchanged with the entry-level unit still averaging over $1600.
At the top end of the one bedroom market – a den plus parking is still averaging over $1900/month.
The entry point for the two-bedroom market dropped by $100 to around $2100/month.
The high-end segment of the two-bedroom market (including a den and parking) is up slightly at $3000 per month.
The three-bedroom market remains in the $3,500 to $4,000 range due to the lack of product versus demand.
As parking spaces in new condo developments average between $35,000 to $48,000, the rental price for a parking spot is just shy of $200 per month.