If you've been to any big sporting event over the last ten years then you must have participated in "The Wave". The bigger the crowd, the more spectacular the visual effect. While the jumping up part is fun, there is also the other part....the anticipation...waiting for your turn to jump up again. Think of the Toronto real estate market like "The Wave". For the last three or four months it's been on its feet and now it's time to sit down. The excitement is still there however. Now it's just waiting for the cycle to work its way around. In real estate parlance we call it "the Summer Market".
Consider the freehold market segment. For the first six months of the year we witnessed a steady increase in new listings. So far in July new listings have backed off by approximately 12%. At the top of the Spring Market voracious bidding affected 70% of the sales in the Toronto Core. Today we are hovering closer to 40%. High end homes, those listed for over $3m remain flat throughout the city while the move up market (homes selling in the $700k to $1.5m range) remain the hottest commodity. Given the activity in our offices we believe that the next two months will be a bit more active than usual.
The condo market continues its positive activity. While new listings have dropped 10% over the previous month, sales have remained unchanged. Multiple offers, once reaching a high of 30% of suites sold, has diminished to a still very healthy 18%. We can't help but deduce that the success of the condo market is linked to a recent survey by Bloomberg Nanos that shows Canadian consumer confidence is at its highest point since the fall of 2009 and consumer debt has decreased for the second quarter in a row. While continued tightening of mortgage lending appears evident, it has yet to put a damper on the condominium sector.