March 29, 2021
The Return of the Freehold Market
Competition within the Toronto real estate market has intensified as we step further into the fall market.
Buyers are back and we are watching prices in the City of Toronto continue to push north in pretty much all property types.
What is interesting to watch is the freehold market make a comeback.
2016 and early 2017 were the time of the detached home dream in the GTA… once we stepped into the second half of 2017 we REALLY saw the condo market take off. Early 2018 was a condo frenzy as the price per sq ft in good neighborhoods rose dramatically.
This was primarily due to affordability…
2018 has been a strong year for the condominium/loft/condo-townhouse market and this is going to continue (although more moderately) through the 2018 fall market.
Prices on average in the Downtown Core are now scraping 1000 per sq ft. This is simply due to lack of inventory and a large demographic of buyers looking to be within walking distance to work, transit, etc…
Its no secret that our transit system here in Toronto is not up to par. I’ve noticed condos in the King West corridor really heat up as the new King Street Pilot Project is a hit for commuters. Prices have now pushed well over $1,000 per sq ft and in some instances are hitting up to $1,200 per sq ft.
This brings me back to my point regarding the freehold market.
Think about a 1000 sq ft condo in King West, or other prime neighbourhoods.. 1000 sq ft x $1,000 per sq ft = $1,000,000.
For $1,000,000 you can buy a 17-20 ft wide house in neighborhoods just outside of the immediate core… such as The Danforth, Beaches, Junction Triangle, Seaton Village, or a variety of others.
What we are now watching take place in the marketplace… is the 2 bedroom condo market has now entered the world of freehold pricing. Especially since every $550 of monthly maintenance fees is equivalent to $100,000 on a mortgage.
A quality 2 bedroom condo in the core is now $900,000 – $1,000,000 at the least.. and that’s with an additional $600 (average) of monthly maintenance fees. This means the 2 bedroom condo market is now demanding the same price (in regards to affordability) as a freehold rowhouse or semi in a neigbourhood just outside of the immediate core.
The ceiling of the condo market has smashed through the barrier of entry to the freehold market.
As I write this there are 14 offers on a 3 bed 2 bath semi I showed my client this weekend in Dovercourt Park…
The 2019 freehold market is sure to be even more aggressive as laneway houses are now eligible to be built-in within the boundaries of High Park and The Beaches. We are yet to see this really take off as the new law permitting laneway houses was just implemented recently. I expect many contractors to shift their business model to be ONLY laneway house builders.
The market operates in somewhat of a sheepish mentality and as pendulums swing.. so does buyer focus.
It’s a great time to cash in on your $1,000 per sq ft condo and make the jump to freehold before it’s too late.
Touch base anytime for an evaluation on your condo and market analysis on what the freehold market is currently like… you could take advantage of the market before buyer attention shifts back to the freehold market.
As always.. until next time.