Will the Condo-19 Virus Spread
The massive downturn in the Toronto condo market is documented everyday
The facts are just easy, Airbnb collapse, foreign University student collapse, downtown restaurant and hospitality worker renter exodus, flight from small living spaces
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The massive downturn in the Toronto condo market is documented everyday
The facts are just easy, Airbnb collapse, foreign University student collapse, downtown restaurant and hospitality worker renter exodus, flight from small living spaces
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It's a long list that radically reduces the number of renters and drives condo owners to seek freehold housing
Heck, we even have relentless addition of new condos from completing construction projects
The simple supply / demand math destroys value with no end in sight
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Heck, we even have relentless addition of new condos from completing construction projects
The simple supply / demand math destroys value with no end in sight
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Well maybe a 2022 end in sight but 12 - 18 months of mayhem
Likely 25% - 35% down from peak condo pricing VERY dependent on product with the sub 500 sq ft product in real trouble
But will the contagion spread to Freehold: Towns, Semis and Detached?
Big Question
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Likely 25% - 35% down from peak condo pricing VERY dependent on product with the sub 500 sq ft product in real trouble
But will the contagion spread to Freehold: Towns, Semis and Detached?
Big Question
4/
No easy answer and not just because I am not in the prediction business
While Freehold market activity has cooled the last 3 weeks prices continue to edge up on product less than $1.2M everywhere
And there are several trends that support Freehold prices
Work from home
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While Freehold market activity has cooled the last 3 weeks prices continue to edge up on product less than $1.2M everywhere
And there are several trends that support Freehold prices
Work from home
5/
Virtually nobody working in office towers STILL
Peak desire to avoid tiny living spaces
Supply side issues, constrained new build for 10 years
But are there forces that would depress Freehold pricing?
Historically a steep drop in Condo prices spreads to other segments
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Peak desire to avoid tiny living spaces
Supply side issues, constrained new build for 10 years
But are there forces that would depress Freehold pricing?
Historically a steep drop in Condo prices spreads to other segments
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But that is not REQUIRED to happen
As opposed to 1990 when property prices last fell and stayed down; condos are now a huge, separate product segment, they are arguably independent of other categories
House prices are ridiculous in the GTA, no question
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As opposed to 1990 when property prices last fell and stayed down; condos are now a huge, separate product segment, they are arguably independent of other categories
House prices are ridiculous in the GTA, no question
7/
But mortgage rates are at the lowest point in history and desire for more living space likely has another 8 to 12 month's run
There may be no longer be correlation between price moves in Condo versus Freehold
Still, some real concerns
This last 4 month burst of RE action
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There may be no longer be correlation between price moves in Condo versus Freehold
Still, some real concerns
This last 4 month burst of RE action
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Has been purely end user driven and may have pulled a bunch of buyers forward
We may have hit a point of unaffordablity, this last pop in SFD pricing
Mortgage rates may stop dropping
The only answer I have for "Will the Condo Price Reduction Virus Spread?"
I don't know
We may have hit a point of unaffordablity, this last pop in SFD pricing
Mortgage rates may stop dropping
The only answer I have for "Will the Condo Price Reduction Virus Spread?"
I don't know
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