In a typical year in the Toronto downtown market, activity slows naturally after the Canada Day Weekend and prices drop slightly during the summer months.
Last year was no exception. After the new & tighter mortgage financing rules were announced in June, July prices fell and remained lower until a slower-than-usual fall market kicked in after the Labour Day Weekend.
Things are not quite the same this year. Prices so far in July are actually lower than in June… but they are about 8% higher than last year. In the first half of July, the number of sales was also slightly higher than in 2012, while the number of new listings was actually a bit lower. Ultimately, there are a lot of discouraged buyers out there who were unable to purchase in the spring market, often because they lost out on bidding wars. Many of these buyers are still looking at the same time as sellers have left for summer vacation.
Even the much-criticized condo market is posting a modest (approx. 2%) increase in prices over last year despite persistent high inventory.
The continued strong demand from buyers, coupled with the general shortage of new listings, particularly for single family homes, points to a very healthy fall market, perhaps even as strong as the spring market.
Another sign of the strength of the Toronto real estate market is the growth in condominium rentals. Average rents for one and two bedroom condominiums also increased by more than the rate of inflation. It is rare that the rental market and the resale market are simultaneously strong: typically a strong resale market means that renters are buying and vice versa. With both the resale and rental markets
in full speed, it seems unlikely that we will see a slowdown any time soon. Almost certainly not this year.
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