Condominium sales in Toronto are expected to slow down
February 3, 2006. As reported in The Globe and Mail today, Toronto housing economist Will Dunning warns of a coming slowdown in Toronto condo sales. Brisk condo sales in Toronto have been defying any pesimisting predictions so far, but Mr. Dunning believes that it is the speculators who are fuelling the market, and expects a downturn in the nearest future.
Mr. Dunning predicts a stable real estate market in Toronto for 2006, with an exception for the condo segment, which he perceives risky. Although a partial reason for last year's brisk condo market was the eroding affordability of freehold real estate due to the rising prices and interest rates, the latest condo real estate boom was caused in part by the increased buying by investors.
Residential rents are recovering from the recent declines, and that makes the condos more attractive for investors. That fact was noticed by developers, who started numerous projects in locations that attract investment buying. But the number of units that will be soon ready for occupancy, Mr. Dunning warns, might cause rents to soften by mid-year.
Predicting the future is not easy, and, at times, Mr. Dunning's predictions have not been completely accurate. The latest real estate activity in Toronto defied expectations of downturn so far.