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<\/a>Photo:\u00a0Eric Michael<\/a>\u00a0\/ Unsplash<\/a><\/em><\/p>\nWhile single-family home sales were on fire during the summer market\u2019s recovery, Toronto\u2019s condominium segment has been charting its own less encouraging path, as it continues to be impacted by increasing inventory levels and higher rental vacancies caused by the pandemic.<\/p>\n
\u201cIt\u2019s a challenging time selling condos right now. There\u2019s a dislocation between sellers\u2019 expectations and buyers\u2019 expectations and where prices are and where they should be,\u201d said Matt Smith, a real estate broker with Engel & V\u00f6lkers Toronto Central Brokerage<\/a>. \u201cIt\u2019s resulting in a bit of a lack of sales volume at the moment.\u201d<\/p>\n The challenges the condo market is facing can be traced back to a slowdown in Toronto\u2019s rental market. A sharp drop in immigration, coupled with fewer students moving to the city, has smothered demand for rental units. A large number of condos used as short-term rentals through platforms like Airbnb are also sitting empty as tourism and business travel remains low and new restrictive rules around short-term rentals that recently came into effect. These factors have led many condo investor-owners to sell their rental properties in a relatively short period of time.<\/p>\n\n Ralph Fox, broker of record and managing partner at Sage \u2013 Fox Marin Associates Ltd, Brokerage<\/a>, explained that Toronto investors who purchased condo units years ago are now sitting on a ton of equity, a motivating factor to list if new tenants aren\u2019t available.<\/p>\n \u201cIt’s the inventory that\u2019s sitting out there, the inability for investors to rent out their units and some people [who are] considering moving out of the city, which is really causing all of this inventory to come online,\u201d said Fox.<\/p>\n While the Toronto Regional Real Estate Board\u2019s (TRREB) September market data is not yet available, anecdotally, agents have noted a shift in the condominium market. Across all price segments, Smith has observed a lull in condo sales since the summer ended and the weather started to turn. However, as inventory increases, eventual downward pressure on pricing could be the signal for condo buyers to jump in.<\/p>\n \u201cIt\u2019s slowly turning into a buyer\u2019s market. We\u2019re trying to get [sellers] to be more negotiable,\u201d said Smith. \u201cNot all of them are there yet, but I think in the coming months, they\u2019re going to become a lot more negotiable and that\u2019s what the buyers are waiting for, because inventory is starting to build up.\u201d<\/p>\n Some types of condominiums are seeing more attention than others. Kori Marin, fellow managing partner and broker at Fox Marin Associates, said that the team recently sold a condo in High Park for over asking in a multiple offer scenario. A former mansion that was converted into suites, Marin says that the property\u2019s home-like character, outdoor space and low-maintenance needs drew the attention of buyers.<\/p>\n \u201cI think [with] condos, it\u2019s really going to come down to uniqueness,\u201d said Marin. \u201cIf they are going to sell in a more unique marketplace with more supply, outdoor space has a lot of value, smaller boutique neighbourhoods have a lot of value.\u201d<\/p>\n \u201cAll of these kinds of characteristics that make condos feel more residential versus feeling more hotel-like, rather than the bigger towers make them more saleable,\u201d she added.<\/p>\n Smith noted that units with dens or larger condominiums, particularly in the 1,000 to 1,500 square foot range, are also selling well. Some of this sales success can be attributed to empty nesters who are downsizing, but still want to maintain a presence in the city.<\/p>\n<\/a>Photo:\u00a0Harrison Fitts<\/a>\u00a0\/ Unsplash<\/a><\/em><\/p>\n