Buyers Turn To Condos As Home Prices Remain High
Thursday Mar 10th, 2016
TORONTONIANS TURN TO CONDOS AS DETACHED HOME COSTS STAY HIGH
The Toronto market is experiencing a growing disconnect between the price of a single-family home and a condominium.
While pursuing MLS listings of Toronto single-family houses, one would get the impression that one- and two-million dollar homes are not out of the ordinary these days. Once again, the condominium market seems to be the more affordable option for first-time buyers who want to continue to live in the city.
When you look at the average detached home at over one million dollars, and the prices that even semis are going for, it's really unreachable for most people. However, this level of pricing is to be expected in any major global city. "Purchasing a condominium is the only realistic option for most first-time buyers." That's the verdict from RBC's latest quarterly Housing Trends and Affordability report, whose authors warn that "single-detached home affordability in Toronto continues to slip deeper into stressful territory for homebuyers."
The Toronto market is experiencing a growing disconnect between the price of a single-family home and a condominium. Even then, the RBC report finds that condos have become slightly less affordable in the last two quarters, leading to a new trend in rental demand.
Despite the latest dire warnings about affordability and bubble-trouble, economists are still optimistic about real estate in general. RBC says that the doom and gloom has always been there and it isn't anything new. The report continues "We think people have been desensitized by the continual negativity in the press over the course of a decade, but yet the actual market is behaving in a completely different manner. When anyone delves deeper into the market and understands the fundamentals they become very confident in the future of investing and living in downtown Toronto. One little known fact is that despite the seemingly red hot Toronto market with stories of multiple offers and bidding wars, over 17,000 Toronto homes did not sell on the first try last year.
Independent research by TheRedPin.com online brokerage confirms that despite the never-ending rise in demand, some properties need at least two tries to sell.
On average, properties re-list for a shocking $24,000 less than the original asking price. TheRedPin.com co-founder Rokham Fard says that while it may seem tempting to pull a listing off the market and re-list on hopes of better offers, the smart money is with selling on the first listing. "Sellers and brokers should leave it all on the field to sell properties the first time around," Fard advises.