The global market has experienced financial stress due to the pandemic, and the real estate market is not left out. While the world was stuck indoors, the demand from homebuyers for Condos went down drastically. According to a report by Redfin, the Condo market experienced a 31% decline year on year in June. On the other hand, single-family homes seemed to fare better as their demand increased in the sale price, seeing a 2.6% year over year with sales totaling $322,000 in June. However, more buyers are jumping back to condo purchases as they are slightly cheaper, with more attractive condominiums like Hearthstone by the Bay for sale looking like an attractive option.
Many factors affected the sale of Condos; but, the traditional attracting features of condominiums became a challenge. Features such as shared amenities like gyms, pools, and elevators, became a source of concern with the fear of the pandemic spread. However, single-family homes experienced a spike in price. According to Redfin economist Taylor Marr, since single-family homes have spiked, buyers are jumping back to buying Condos as they are “just as affordable as renting an apartment.” The difference in the piece is displayed on Condomapper.Ca
Also, The Toronto Regional Real Estate Board corroborates the fact that condominium apartment sales in the region had dropped. The second quarter saw the sale of 3,459 condominium apartments down by 51% compared to the sale of 7,024 apartments in the same quarter the previous year. Also, the number of new condo listings has dropped from 11,114 new listings to 8,717, about 22% lower than the number in the same quarter last year. In the second quarter of 2020, the average selling price for condos saw a 5% increase to reach $619,707 from $589,622 in last year’s second quarter.
According to Lisa Patel, TRREB president, the reasons for the dip in new listings and sales were attributed to the fear potential buyers have towards the spread of COVID-19. She also added that several potential buyers held out as a result of the measures taken to tackle the pandemic. However, she predicted that sales would improve in the third quarter, as the market is moving towards a recovery in June.
Seeing that Single-family homes had more competition in sales than Condos with nearly 47% of single-family homes going off in the market in June, up from 38.1% in June 2019. Jason Mercer, TRREB’s chief market analyst, asserted that it would be important to take note of the relationship between the supply of listings and demand for sales in the condo market as the economy recovers. He predicted that prices would become moderate as investors may likely want to offload their condos on the market even though struck regulations are currently placed on rentals like Airbnb and story term stay at the moment.
Overall, the condo market has seen a 45% year-over-year increase in condo rental listings for the City of Toronto in the second quarter of 2020. In the same period, there was a 25% decline in the number of leased condos. The growth in listings was noted in 26 neighborhoods, while the increase in leasing was only noted in three neighborhoods.