New arrivals to Calgary, and more broadly to Alberta, who sold their homes in the Greater Toronto Area (GTA) are not likely to be second guessing their decisions to leave, as Toronto’s once red-hot condo market looks more like the Antarctic landscape. Canadian Mortgage Professional (CMP) reports prices and sales of condos in the GTA continued to plummet as a glut of supply had flooded the market. At the height of the pandemic-induced housing crisis, sellers took bids from those lined up to buy, and hundreds of millions of dollars were invested by developers to take advantage of the buyer's pool. That’s all over now. “Sellers are making steep cuts to original listed prices as they attempt to offload their properties,’ says CMP. “Condo sales were down by a combined 25.1% in the city centre 416 area code and surrounding 905 area code in May, contributing to a year-over-year dip of 6.4% in condo prices across the GTA.” “That slide arrived amid a continuing overall slump in the city’s once-red-hot condo market as investors flee the space and rental and purchase demand dries up.” Sales are down in all segments of the market. .“What we’ve found is if you’re selling a condo in this market, it’s been quite a challenge,” Taz Zaide a mortgage agent with 6ix Mortgage Group, told CMP. “A lot of people are listing them on price ranges that they expect but aren’t getting any offers, so they have to further cut their listing price just to get more traction.” A lack of buyers has resulted in thousands of condos sitting unwanted on the market even with a flood of new inventory set for completion before the end of this year, potentially meaning even more pressure will be put on prices. Homeowners who see the price declines as an opportunity to move up the housing ladder are sidelined because they need to, but can’t, sell, their current condos before they can move to a new property and are finding a sale impossible. “The listings for condos are sitting quite a bit in the market and we’ve had instances where a lot of clients are buying and selling, and if they’re selling a condo to upsize, they’re finding that they’re having a lot of trouble figuring out what the price should be for that condo because they’re expecting more than they should be,” Zaide said. .“And so, they’re not getting as many showings as they should be as well. So, it sits there in the market for quite some time.” Even investors, who are usually quite savvy about snapping up low-priced condos, have pulled back as supply increases. “Unsurprisingly, a deep chill has also settled over the condo market for investors because of the well-publicized woes of owners in that space over the last year,” says CMP. “The main thing is that the maintenance fees are still going up for those condos even though the prices are down,” added Zaide. “So a lot of those people would rather just not have to pay $1,000 a month putting maintenance fees on some of these condos, where they can just take that and pay towards a mortgage in the form of a slightly higher purchase price, instead of buying a condo, let’s say buying a semi-detached or even a townhouse.” Potential buyers are likely trying to time the market, said Zaide. “Even many buyers who now find themselves in a position to purchase are taking a pretty cautious approach to the market,” he said, adding the buyers-to-be are waiting to see whether prices and rates will tumble even further and are looking for the first signs that prices are on the verge of rising. .Zaide said that’s not necessarily the right approach. “They might not get a better opportunity than the current market to make their move, with sellers’ desperation a rarity for the Toronto real estate space,” he said. “I think there’s no good time to jump in more than now, especially to try to buy a condo, because I do feel it’s bottomed out quite a bit on the condo side,” he added. “And a lot of sellers of condos are desperate to just get rid of them because they’re sitting in the market at certain price points.” “I’ve noticed a lot of these condos are just being relisted at lower price points multiple times because they’re not selling for the amount that the sellers are hoping for.”
