Toronto’s High-End Condos Outshine Slowing House Market Amid Retirement Boom and Economic Uncertainty

A tale of two different housing types was the theme of this past week.

House sales were down by nearly 31% last week, and house supply increased by nearly 11%, which is a pretty strong signal that houses are slowly starting to experience a lull while condo sales jumped up 22%, and supply only nudged up 1.7%

But of course, if you listen to BlogTO, you’d assume that nobody wants condos and nobody is buying them. Obviously laughable.

Does this mean that the condo market is flying and everything is going into bidding wars?

Not at all.

It means that some of the nicer, more turn-key condo options are selling quickly for great numbers.

We’re actually seeing very expensive downtown condos sell faster than we’ve seen in a while. Especially in buildings like 55 Front, The Berczy, which is one of the more in-demand buildings in the core.

Why are they selling? We have a record number of folks in urban communities who’ve either retired or are close to retiring but don’t want to leave their urban communities, so they’re selling their houses and scooping up large and in-charge apartments in the same area.

That is why investing in larger units in urban communities will always be a strong investment. Not all of these folks are buying either.

When you’re retirement age, owning your home may not make the most sense, and the flexibility that comes with renting is too attractive for some.

Either way, you slice it, larger units are performing very well at the moment, but condos are performing well virtually across the board.

Houses are slowing. There is Nothing you can see as of yet, but sales are down, showings are down, and we’re not seeing an obscene number of offers on urban house listings like we were at this current cycle’s peak about a month ago.

Interest Rate & Inflation Update

So what’s going to happen with interest rates next week? For the first time in a while, economists and other pundits are split on whether there will be an increase or a continued holding pattern.

My betting days are behind me, but based on the positive inflation news over the past few months, and one of the major contributing factors to the uptick in April’s inflation number is increased interest costs due to the rising rates, I don’t think the Bank of Canada is going to react to this one blip when you have much more evidence that inflation is actually heading in the right direction.

And of course, it’s important to understand that managing inflation isn’t a linear process. There will inevitably be blips, but a major interest rate decision on one blip would be a mistake in my opinion.

I seem to be on the same page with Concordia Professor and an RBC Economist, so that’s reassuring.

“Concordia University professor Moshe Lander told Global News on Tuesday that the central bank could view the April inflation uptick as “just a blip” and wait for more data — particularly concerning wage growth in Canada’s tight labour market — before moving again.

“I don’t think that the Bank of Canada is worried,” he said.

“They understand that (taming inflation is) not a linear progression … there will be bumps along the way.”

RBC economist Claire Fan said in a note Tuesday that the Bank of Canada’s rate hikes to date are now starting to show signs of “weighing on economic growth,” suggesting inflation pressures will continue to ease. RBC expects the central bank’s key rate will remain on hold for the remainder of 2023.”

But rest assured, regardless of what happens in June, the heat is already slowly leaking from the market, especially for houses. So nothing will change this week; however, if there is a continued halt to the hike cycle, you can bet that some more cautious buyers will be back out in full force.

Will things heat up as they did in March and April of this year? Likely not, but the pain of the summer lull would certainly be minimized with a halt and a few more buyers out and about shopping.

What should buyers & sellers do now?

Honestly, if you’re a buyer looking for your first or next home, don’t stress about the day-to-day market talk. Just focus on staying well within budget and locking down your next sanctuary. This day trader talk is only going to stress you out and paralyze you. It’ll keep you from making a really strong decision.

If you’re a seller, keep your expectations in check. You may not get all the action you’ve seen over the past little while. You may have to adjust your strategy, and that’s ok.

Make sure you’ve got a strong agent on your side, and that’s all you can do.

Thanks so much for your attention this week. Have a wonderful day, and please let me know if any of your questions remain unanswered.

And if you’d like to book a call to discuss your specific real estate needs, you can do that here, and I really look forward to helping you.

Have a wonderful day, and I’ll see you next week. Don’t forget to subscribe to the blog so you get this in your inbox asap, and we’ll see you on Youtube!

(please subscribe to the YouTube Channel here, where I go over all of these reports in more detail)

Urban Markets: Downtown & Surrounding Areas
House Average Price: $1,640,123
House Median Price: $1,481,500
517 Active Listings
62 Firm Sales This Week
Months of Inventory (MoI) ~ 2.04 (up from 1.69 last month)
Average Days on Market ~11.41

Condo Average Price: $834,369
Condo Median Price: $778,888
1593 Active Listings
143 Firm Sales This Week
MoI ~ 2.81 (up from 2.67 last month)
Average Days on Market (DOM) ~15.33

Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $3,035,426
House Median Price: $3,030,000
136 Active Listings
13 Firm Sales This Week
MoI ~ 3.11 (up from 2.40 last month)
Average Days on Market ~ 17

Condo Average Price: $1,201,261
Condo Median Price: $837,450
218 Active Listings
16 Firm Sales This Week
MoI ~ 4.05 (up from 3.76 last month)
Average Days on Market ~ 18

Leaside, Davisville, Yonge & Eglinton
House Average Price: $2,553,700
House Median Price: $2,200,000
47 Active Listings
10 Firm Sales This Week
MoI ~ 1.43 (up from 1.14)
Average Days on Market  10

Condo Average Price: $770,467
Condo Median Price: $731,000
127 Active Listings
15 Firm Sales This Week
MoI ~ 2.75 (up from 2.43 last mth)
Average Days on Market ~ 15

Birch Cliff
House Average Price: $937,000
House Median Price: $920,000
29 Active Listings
3 Firm Sales This Week
Months of Inventory (MoI) ~ 1.76 (up from 1.05)
Average Days on Market ~ 4

Kingston Rd Corridor to Highland Creek
House Average Price: $1,417,100
House Median Price: $1,400,000
74 Active Listings
9 Firm Sales This Week
Months of Inventory (MoI) ~ 1.71 (up from 1.66)
Average Days on Market ~ 9

Condo Average Price: $753,833
Condo Median Price: $755,000
41 Active Listings
6 Firm Sales This Week
MoI ~ 3.30 (up from 2.76)
Average Days on Market ~ 10

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