There is much buzz about the direction of home prices in Canada, particularily both Toronto and Vancouver. Below is a typical example of the media's "reporting"
Condo prices in Toronto may have fallen steeply from their peak when you take into account incentives being offered to buyers, a Toronto developer has reportedly said.
The Globe and Mail reported Monday that a developer “who declined to be named” estimates the actual prices of condos have fallen by about 15 per cent.
The unnamed developer's assertion echoes comments commonly heard within Toronto's real estate community these days, and it suggests Canada’s largest real estate market may be weaker than recent data indicates.
With the number of condo sales falling, developers have turned to giving buyers discounts in the form of free furniture or reductions on condo fees, among other things. Thus the official sales prices remain steady, while actual prices come down.
Real estate research firm Urbanation reported earlier this month that condo sales in Toronto have fallen 18 per cent over the past year, though that survey showed prices per square foot rising a modest 2.6 per cent, to an average price of $376,000 for a new condo.
But what may be bad news for condo sellers may also be good news for condo renters. The research firm reported Monday that rentals of condos in the city jumped 20 per cent from a year earlier.
Faced with high prices and predictions of a housing market correction, many buyers have chosen to stay out of Toronto’s condo market and rent instead, placing upward pressure on the rental market. Rental prices are up 4.1 per cent in the past year, Urbanation said.
Urbanation Senior Vice President Shaun Hildebrand credited “a lack of growth in traditional rental supply” for the boom in condo rentals. (After a boom in the 1960s and 1970s, few new rental apartment buildings have been built in Toronto in recent decades.)
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Interestingly enough, to steal the line from Paul Harvey, NOW FOR THE REST OF THE STORY ...
Please check out Ben Myers and his blog THE OTHER SIDE OF THE STORY, where he interprets the data and makes sense of the numbers, please click here for "the other side of the story"
For another article on the Toronto housing market, please click here