The Bibby Group | January 2021 Newsletter
With a turbulent 2020 behind us and additional lockdown measures in place to start the new year, one would expect a continuation of the fall’s lacklustre marketplace for the downtown Toronto condominium market. Surprisingly, however, late December and early January have seen a flurry of activity, indicating that our condominium market’s recovery may finally be here.
Buyers emerged at the end of the year, no doubt lured by attractive interest rates or buoyed by the general sentiment that the marketplace has reached its bottom. In fact, the Toronto Real Estate Board indicated that year-over-year transactions were up by nearly 65% overall and an astounding 102% for the downtown condominium market. December turned out to be the second-busiest month of the year (July was the busiest). With the start of vaccinations, 2021 has begun on a positive note. The number of recently signed contracts—which offers a peek at the market to come—appears robust.
The Toronto Real Estate Board released its most recent statistics, and they revealed that condominium values have declined 5–6% in the downtown core year over year (which, in my opinion, will likely settle at 8–10% once we have a full year of data). These are the numbers buyers and investors alike have been longing for.
While we can assume that the increase in activity is investor-fuelled, many will argue that declining rents make these opportunities less attractive. In general, however, downtown condominiums have been a cash-flow-negative investment for years. Many buyers are looking at long-term equity appreciation. Whether the rental market levels off and remains flat or improves as we head into the spring will depend on how we emerge from the pandemic and resume a more familiar lifestyle. The data we collect from January will set the tone for the spring market.
Happy New Year to all our readers! We wish you safety and great health for 2021 and look forward to reporting back in February.