ORIGINALLY PUBLISHED JANUARY 18, 2018 ON THE GLOBE AND MAIL
Spring could bring a shift in the Toronto area’s real estate landscape as buyers and sellers take advantage of the shrunken gap between the prices of condo units and detached homes.
Since the condo market has held up better than the market for detached houses, Toronto real estate agent Manu Singh says he’s been talking with many clients who are contemplating a move in the spring.
Meanwhile, he expects a fairly subdued market in the coming weeks. Buyers and sellers are both a bit apprehensive after a volatile Toronto market in 2017 and new rules surrounding a “stress test” for buyers seeking uninsured mortgages came into effect Jan. 1st.
By late February or early March, the spring market will bring a fresh spate of activity, Mr. Singh predicts, but he warns that buyers are likely to remain cautious for the first half of the year as they absorb policy changes – including a 15-per-cent tax on purchases by foreign buyers – introduced by Ontario in April.
“We’ve been hit with so much regulation,” Mr. Singh says. “It’s like we’ve been stomped on.”
He currently has 11 clients who are planning to sell their condo unit and use the funds to move up to a detached house.
The price of a detached house in the 416 area code dropped about 20 per cent between April and December while the average condo unit in the core saw an 8-per-cent dip .
At the end of December, the average price for a detached house in the 416 stood at $1,250,235 compared with $1,578,542 at the end of April. The average price for a condo in the core was $532,700 at the end of December, compared with $578,280 at the end of April.
Mr. Singh says the shift makes sense for couples who have owned their condo for between three and five years and now have some equity built up. In many cases, his clients are double-income couples in their 30s who have been living in a downtown two-bedroom, two-bathroom condo of 1,000 square feet or more.
“They’re sitting in a product that’s more scarce,” he says of the spacious condos they occupy. Downtown units typically have a one-bedroom-plus-den layout.
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