As COVID-19 measures wear on, home sales and price trends continue to diverge across the Greater Toronto Area (GTA) in favour of low-rise, single-family homes; particularly in condo-dense markets like the City of Toronto, where buyers are seeking more square footage and better access to green space. In addition, restrictions on travel and shifts to an online learning environment for university students have further impacted the demand for condo rentals in downtown Toronto.
The culminating effect, as noted by Toronto Regional Real Estate Board (TRREB) President, Lisa Patel in their most recent market update, is that condo buyers in today’s market are benefitting from “much more choice compared to last year. Pre-COVID polling had already pointed to an increase in investor selling in 2020. The pandemic only added to this trend with a stall in economic growth and a halt to tourism impacting cash flows for many investors.”
To understand the extent to which condo buyers and sellers were impacted by market shifts caused by the pandemic, Zoocasa calculated the estimated price per square foot and sales for 10 condo buildings in the downtown Toronto area that allow, have previously allowed, or were known to be popular for short-term rentals. These buildings are the same ones used in an analysis from Zoocasa earlier this summer, which showed that the growth in new listings for condo apartments available for rent and sale in these buildings in June far exceeded new listings growth across the Niagara and Waterfront Communities 1 neighbourhoods (where these condo buildings are located), and the City of Toronto as a whole.
Our new findings show that while the estimated average price per square foot for sales over the last 8 months between Mar 15 (the start date of COVID-19 emergency measures) and Nov 15, 2020 remained similar to the same time period last year, sales volumes dropped considerably, in some cases dropping over 50%. However, the number of condo listings grew significantly in these buildings, offering active buyers more inventory to choose from this year.
Despite Steady Average Price-Per-Square Foot, Slower Sales Means Buyers Have More Choice While Sellers Face Stiffer Competition
Among the 10 downtown Toronto buildings included in our analysis, the estimated price per square foot for the period of Mar 15 to Nov 15, 2020 ranged from the low $900’s to over $1,000 with year-over-year changes ranging from just -6% to +4%. Half the buildings had an average price per square foot over $1,000, indicating that some of the condo buildings are still priced at a premium compared to condos across Toronto.
Just three buildings – Harbourview Estates II, Maple Leaf Square and 300 Front – saw year-over-year (y-o-y) sales growing at 54%, 26% and 9% respectively. Everywhere else, sales declined y-o-y, ranging from drops of -14% at Parade II and -54% at Peter Street Condos.
As such, Emma Pace, a Zoocasa agent in Toronto highlights that condo buyers in the downtown Toronto area can get a bit more “bang for their buck” in today’s market. That could mean having a little bit more square footage, or alternatively, a better view, a parking spot, or a locker, that may have been out of reach in a pre-pandemic market. Buyers also have the opportunity to negotiate, particularly when it comes to closing dates and conditions.
Pace notes that, “most of the available supply is being pushed into the sub $1M price point, as much of the inventory is coming up from investors who are cashing out of the market as a result of the slowdown in rental demand due to the pandemic.”
As expected, while buyers have a bit more runway, sellers on the other hand are facing increased competition and should prepare for their properties to stay on the market longer than in previous years. According to David Aquino, a Zoocasa agent in Toronto, in order to compete with other sellers in this current market, owners need to adjust their expectations and be prepared to invest in marketing and staging and potentially even renovations to help differentiate their units and make their properties more appealing to buyers.
Condo Buildings Popular for Short-Term Rentals With Highest Price Per Square Foot
Mar 15 to Nov 15, 2020 figures compared to the same period last year.
1. Ice Condos – 12 & 14 York St
Est. average price per sq ft: $1,055 (+1%)
Sales: 44 (-37%)
2. 300 Front St
Est. average price per sq ft: $1,043 (-6%)
Sales: 24 (+9%)
3. Peter Street Condos – 101 Peter St
Est. average price per sq ft: $1,037 (-4%)
Sales: 13 (-54%)
Check out the infographic below, highlighting the estimated average price per square foot and change in sales for a selection of 10 downtown Toronto buildings that allow, until recently allowed, or are popular for short-term rentals.
Methodology
The selection of condo buildings that permit, recently permitted, or are known to be popular for short-term rentals were sourced from Zoocasa agents. Sold prices and approximate square footage for individual condo units from March 15 to Nov 15, 2020, and March 15 to Nov 15, 2019 were sourced from the Toronto Regional Real Estate Board on Nov 23, 2020.
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