Friday, May 22, 2020

Bosley Market Insight Week Ending May 22nd 2020

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As we navigate through these uncertain times, we are wondering what condo life will look like in the future. To illustrate how quickly the condo market changed as a result of COVID-19, resale activity was up 25% year-over-year during the first half of March 2020 and fell 21% year-over-year in the second half of the month, with even steeper annual declines of over 70% reported for April. However, the GTA market was exceptionally tight leading into the COVID-19 period, creating spillover demand that has enabled the limited number of units on the market to continue transacting. In fact, the average sale price-to-list-price ratio has remained near 100% through April, and the average days on market was unchanged at 18 days.
As sales have declined by a much faster pace than new listings, resale condo prices have experienced some reduction. Preliminary resale data for April reported a 2.2% annual decline in average resale prices for condos, and most of the decline has occurred for higher-priced units. Overall, industry experts feel that resale values might be down by 5% at the end of 2020 compared to the end of 2019. Again this is all speculation as no one has a crystal ball.
Toronto rents were also down on all fronts. In April, the average one-bedroom rent in Toronto dropped 2.2% month-over-month to $2,200 and two-bedroom rent fell 4.1% month-over-month to $2,830. The decline in rental transactions can clearly be related to the impact of the protective measures and economic uncertainty stemming from the onset of COVID-19 pandemic, with renters less willing or able to take on a new lease at current rents, as well as the closing of Canadian borders and the challenges with showing units and planning for a move in the current environment.
Of importance, rental supply did not experience the same degree of decline as leases, with new listings decreasing by a more modest 7% in the post-COVID-19 period from a year earlier. The relatively more stable level of new listings may be attributed to a rise in condo completions in the first quarter, tenants unable to pay their rent providing notice to vacate, and some short-term Airbnb units becoming available in the long-term market.
Bosley Real Estate Ltd. is a full service boutique brokerage operating in Toronto, Niagara-on-the-Lake, Port Hope and Cambridge Ontario since 1928. We have four centrally located offices and over 250 sales representatives selling and leasing homes and condominiums in all the vibrant communities we work in. Our brand is well recognized internationally thanks to our unique affiliation with Leading Real Estate Companies of the World. Our sales teams meet weekly to discuss market conditions, trending topics, and anecdotes that more accurately reflect the true temperature of the real estate market.