Toronto Real Estate in the Time of Coronavirus

It has been just over a month since all non-essential workplaces were ordered to be closed due to COVID-19 and we hope you are keeping healthy and safe.

It feels like we have been as busy as ever with Zoom meetings with developers, mortgage specialists, and economists and we wanted to give you a quick update from a real estate insider’s perspective – plus, at the end of this article, don’t miss an exclusive, secret deal in Toronto’s Downtown core that is $250 per square foot lower than other developments nearby with one year FREE property management.

How did the Toronto resale market perform in April?

The Toronto market was on a record pace when COVID-19 hit. While most showings are now virtual, multiple offers are still happening – even on higher end properties listed at $2.5 million plus.

• Average days on market in April 2020 was 16 days, compared to 17 days in April 2019.
• Average ask to sold ratio for April 2020 was 99.76%
• Average price for properties sold in April 2020 was $908,000 compared to $909,000 in April 2019.
• Listings sold in Toronto on the MLS in the last 7 days was $985,000!!!

What about the rental market?

Anxious landlords were reducing prices quickly as demand from foreign tenants disappeared with the closing of borders and international renters cutting leases short. The rental market is starting to pick up again but definitely won’t be at full throttle until we are back to working again.

How has financing been affected?

Mortgages have become harder to obtain – especially for investors who rely on rental income. Every lender has reacted with different rule changes and the entire approval process has been delayed. Mortgage extensions have been available but they come with additional interest costs. Rates have dropped – but not as significantly as expected. Refinancing (taking money out of properties) has been up as many owners are freeing up capital.

What about the pre-construction market?

Most new condo launches have been delayed until the middle of summer or possibly the fall.

Land prices have already been established and without lowering construction costs significantly, developers won’t be able to lower prices as they need to generate enough cash for a development to be “financially viable.” If a development is not “financially viable,” then the developer will simply wait to sell it in the future.

Prices will hold strong and likely increase as fewer new developments launch for sale this spring/summer.

So what’s this exclusive, secret deal?

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• $250 per square foot lower than nearby developments
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Ryan Coyle, who is the author of this article, is the Managing Director and partner at CONNECT Asset Management. One of Toronto’s leading experts in pre-construction condo investing, Coyle has sold more than $1 billion in real estate since 2004 and currently owns over 30 condo properties. To learn more about pre-construction opportunities in Ontario and the company’s innovative approach to investment, visit connectassetmanagement.com or email Ryan directly at: [email protected].