As softening prices and tighter lending restrictions transform Montreal into a buyer’s market, Toronto insiders are divided on whether their city is already there.
“I believe the Toronto condo market is shifting from a seller’s market to a balanced market,” said Ryan Coyle, a real estate broker with The Condo Store Realty Inc. in Canada's largest metropolis. “I expect to see moderate growth over the next few years as we start to see interest rates increase. We need to stop focusing on the August and September numbers and see what happens in the first few weeks of October to really gauge what type of market we are in. “
Numbers released by TREB last week reveal sales plummeted 21% last month compared to September 2011, a figure that has many industry experts concerned, particularly where the condo market is concerned.
Sales for condos were down 27% compared to last year, but Coyle believes this is about to change.
“As the (dust) settles from the mortgage rule changes,” he said, “I have personally already seen things pick up as investors and end-users are coming off the sidelines and are buying condos again.”
He points to factors such as Ontario’s Places to Grow policy, which aims to increase residential density in downtown cores, which has led to the interest in condos over single-family houses.
Still, not all agree with Coyle.
According to economist Robert Kavcic at BMO Nesbitt Burns, Toronto has already begun to morph into a buyer’s market.
“With new listings up 4 per cent year over year against a backdrop of falling sales, and with plenty of potential resale condo supply coming over the next year, Toronto is quickly heading for buyer’s market territory for the first time (depending on your definition) since the recession,” Kavcic said.
For investors unsure of whether to take advantage of market conditions, Coyle offers some advice.
“Hope for the best, but plan for the worst,” he said. “ If the real estate market takes a hit, can you get a tenant in there to carry you through a bad market? If you can sleep at night knowing this is a possibility and you have the right team to find you the right property then real estate is probably a good investment.”
For investors looking to buy now, he advises looking for condos in sub-markets that are likely to undergo growth, such as Toronto’s Canary District, and other areas poised for development over the next five years.
(Written by Jemima Codrington-Canadian Real Estate Wealth)
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