If you didn’t catch the headline of this article, you might be surprised to learn that the strongest real estate market in 2017 is in fact luxury condos.
Thanks to the downsizing baby boomers and Gen X execs looking to stay within the downtown core, un-interested in suburbia (just yet), the number of condos sold over one million dollars this year is currently 86 percent higher than a year ago!
However, there are still some signs of lagging. Condo market sales were 24 percent lower in August than the same month last year. Downtown condo sales were down by 22 percent but they were 15 percent higher than in July. A similar trend was evident in the Humber Bay condo market where sales in August were down by 16 percent compared to last year but flat compared to July.
If you’re a so-called expert and still believe that we are in for a major real estate correction, you may want to take a closer look at what’s happening in Toronto.
The reality is that the economic fundamentals for Toronto have not changed.
Two bank prime increases to 3.2% will not slow this market. The rate increases are simply a reaction to robust job growth and higher wages – meaning more buyers who can afford more! The qualifying mortgage rate for insured mortgages is 4.84% but you can still get five year fixed rate mortgages under 3%!
Another sign that the market is even stronger today can be found in the pre-construction market. A year ago, there were over fifteen thousand condo units that could be purchased. Today, the number is at 6,000. At the same time pre-construction prices are 27 percent higher than a year ago. That is a trend that can only mean higher condo prices going forward in the re-sale market.