The frenzy in Toronto’s downtown condo market has wound down, and that might not be such a bad thing.
In fact, it’s an opportunity for sales agents to do more than merely amass as many non-conditional offers as possible ahead of offer dates. Brett Starke, team lead of Starke Realty at PSR Brokerage, sold three units in the last two weeks that had conditional offers on them, and he says it infused more logic into the transactions—something that’s been missing for a while.
“What I like about that is there’s more logic to it, and sales agents are working as advisors again rather than order takers, like we have been for a while,” he said. “On the buying end, it’s normal for people to have an opportunity to think about what they’re about to spend, because it’s likely the most money they’ve ever spent in their lives.”
Starke added that Toronto still has the best condo market in Canada. Although the investor market has taken a hit, end users have come out of the woodwork in droves, now that they have, in addition to historically low interest rates at their disposal, less competition.
“Airbnb-friendly units are hurting, like the Ice Condos at 12 and 14 York or Maple Leaf Square Condos, or 300 Front St. All the buildings specifically marketed to investors for short-term rental income are hurting, but the properties that have livable space are doing well,” said Starke.
Moreover, downtown condo owners who spent extra money on upgrades and enhanced finishes aren’t seeing their units decline in value. Starke says those value-added finishes are fetching them higher sale prices.
“Instead of having one condo in each building available, there are at least a couple to choose from, and the upgrades you put into your units at the beginning have value now, whereas before people arbitrarily bid regardless of the upgrades,” he continued. “Now with upgrades, your unit could be worth $10,000-20,000 more than it was before. There’s a return to reason and logic, which I quite like.”
The downtown condo market has tilted in favour of buyers, many of whom are doubtless taking advantage of an historically-low interest rate. But Daniel Johanis, a mortgage broker with Rock Capital Investments, says the low rate is also proving a boon for investor-owners who are refinancing their mortgages.
“Now they can unlock up to 80% of the appraised value,” he said, “and in some cases the payments could be lower than their existing payments.”
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Written by Canadian Real Estate Wealth.
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Canadian Real Estate Wealth