2017 was a very interesting year in downtown Toronto Condo real estate market. At the beginning of the year sales were average but prices were growing by the month. Even high-end luxury units were selling quickly and for above the listing price. Condos over a million dollars were up close to 35% and units over $4,000,000 were up 82% over the previous year. Everything was rolling nicely. 1st quarter numbers came in and we saw prices up and price per square foot up in Yorkville to over $1,000 and Bay Street to mid $900's.
At the end of the 1st quarter we heard what we all thought would be damaging news to the real estate market in Ontario and especially Toronto where the Ontario Government was to change the rules for buyers, trying to slow the market and lessen prices. It was called the Ontario Fair Housing Plan, and was launched April 20, 2017. The multi-faceted plan was meant to help moderate demand, address supply, protect buyers and renters, and promote affordability in the provincial housing market – all of which is intended to increase market stability.
One of the points was supposedly to cool the overheated condo market in Downtown Toronto by adding a 15% non-resident speculation tax (NRST) to the price of homes in the Greater Golden Horseshoe. This applies to transfers of land that contain between one and six units. The goal was to prevent non-Canadians from buying and reselling properties pre-construction, or assigning units before closing. TREB, in a panic, protested this stating it could cause the market to stall and prices to fall. In the first month we saw an increase in average price per square foot but we did see a fall in the 2nd month.
Summer arrived and we were still unclear of how the real estate condo market would respond to the drastic changes. We learned quickly, however, that it had little effect on the downtown Toronto condo market. In fact most of the concerns were coming from the real estate agents and brokers. The market dropped in sales dramatically but we saw a steady growth in the average price per square foot in each building. Yorkville came in strong, Bay Street was still good for sellers. The problem was that the media was talking about how bad the market was because inexperienced agents were panicking and that put a scare into sellers. They decided it was too much of a risk to list their condo. This turned into a may have been the wrong decision as the market has carried on very well for the later stages of 2017. Yes, it has been a bit of a roller coaster ride but for those sellers that have stayed in the market they have done very well for themselves. Not every month has the market increased but overall the market is up.
Overall, it was a great year for condo real estate in 2017 with price increases of approximately 20%. I do not foresee a big change for 2018 but expect to see more listings on the market as potential sellers will begin to see that it is still a sellers market in the condo industry.