Toronto condo sells at $320,000 loss amid condo market woes

A 37-storey luxury apartment in the heart of Toronto's entertainment district was sold at a loss of $320,000. According to real estate consultants and observers, this is an example of an apartment market that has not experienced such difficult conditions in decades.

The three-bedroom unit on King Street, close to the Toronto International Film Festival and across the street from Roy Thomson Hall, sold for $1.23 million this week — after several failed attempts, according to Robota Romeo. Listing real estate consultant.

"We are definitely in the buying market," Romeo said in an interview. Noting that many other agents in the same building face the same problems, he said real estate agents feel pressure to up their game to make every sale.

He said his client was happy with the deal, even though it was about 21 percent less than the $1.55 million he paid for it in 2021, because it allowed him to eventually shift his capital elsewhere.

He said: "The client wanted to change this chapter of his life and move forward. He was satisfied with the sale price.

A recent report on investing in GTA condos titled "Challenging Times" by Urbanation and CIBC finds that the glut of condos for sale in the Greater Toronto Area has prevented many owners from selling, as a combination of factors allows buyers to be selective, even If the long term effect it can be bad for affordability.

CIBC's Ben Tal and Urbanation's Shawn Hildebrand wrote that while the low-rise market appears to be "in decent shape," the apartment market is "clearly deteriorating into recession territory with conditions not seen in decades." ".

Prices are too high for buyers to jump in, but sellers are unwilling to drop prices because of high development costs, preferring to offer incentives rather than competition, they said, adding that sales of new apartments are at their lowest level since the late 1990s.

"The math in terms of demand (investors) and supply (developers) doesn't make economic sense, leaving the market at a dead end," they write.

Ralph Fox of Fox Marine & Associates said that's the situation real estate agents see on the ground, though he cautioned that any property could be cited as an example of the phenomenon.

He said: "Properties stay on the market longer. "Inventory months are starting to increase on the apartment side."

But he said while many pre-sale condo owners are investors, many are not in a position to be forced to sell.

"They are holding," he said, adding that this is his advice to anyone who plans to sell in this market. "If you have a hard-earned asset in Toronto, hold, hold, hold," he said. Rates will come down.”

One factor in the build-up is that developers of new apartments were marketing to investors rather than the end user of the building.

"We are receiving a lot of products at a bad time ... some people will unfortunately lose money in the next few months," said Pouyan Safapour of Davron Development Company.

But he said the sluggish market has also had a negative impact on the ability to start new apartment projects, meaning the number of buildings is falling. He said: This means that in the next few years, the number of units entering the market will not match the population.

"It would be very bad for affordability," he said. There will be a sharp increase in the prices of apartments of all types.

In the lower-end market, supply is lower, so buyers are still competing for properties, said Tota Gucci, a Toronto real estate agent.

He pointed to a Leslieville detached house that he listed for $1.728 million, and since three buyers bid on it, the final sale price was $2.12 million.

He said: "Buyers, they are still holding and being cautious and waiting for interest rates to drop. However, they should jump now because while they wait, prices will rise.”

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