After an investor asked him to look into the upper echelons of the Toronto high-rise market, la Fleur was shocked to discover 145 condos on MLS listed for $1 million or more in the first half of the year alone. It’s believed these high-price properties could take 20 months to sell given the current demand.
Those numbers don’t include shadow inventory, such as suites that haven’t sold in five star projects like the Trump International Hotel & Tower, Ritz-Carlton, Shangri-La and Four Seasons. There could also be a number of empty luxury units within the city according to la Fleur. In newer projects, developers don’t like to put too many unsold units on MLS at once since it could make the condo look bad and shake prices.
“It’s very crowded out there,” said la Fleur, pointing out that he found prices had flatlined or or even slumped for people who bought into the hotel-condo hybrids pre-construction.
However, real estate watchers from Urbanation and Sotheby’s don’t find the stock as troubling.
“When you look at the numbers and relate them to the rest of the market, it would suggest that there is a glut, a drastic oversupply,” said Shaun Hildebrand, senior vice president of condo research firm Urbanation.
“But this is a very niche segment of the market. It really needs to be looked at in isolation.”
Hildebrand pointed out that months of supply in Yorkville has always run about twice that of the conventional condo market.
Ross McCredie, chief executive officer of luxury realtor Sotheby’s International, told the newspaper that many high-end purchasers are following suit with another widespread trend in Toronto condo’s market: leasing out the spaces since the vacancy rate is so low in the city.
The real estate firm also recently released a report on the state of the Canadian luxury market and found that in Toronto, sales of $1 million dollar (or more) condos saw a 4 per cent gain from the first six months of 2013 compared to the latter half of 2012.