Now Might Be A Good Time To Buy a New Condo — Really

If you’ve been following the news, you may have noticed quite a bit of negative press about Toronto’s condo market. Sales have dropped to historic lows but prices, on average, haven’t dropped significantly despite the city’s reputation for expensive real estate.

At Spectrum, we firmly believe that it is impossible to time the market, and that you should buy or sell real estate based primarily on your own personal circumstances. But if you are thinking of buying a new condo in Toronto and have been holding off on a purchase because you are hoping for more favourable market conditions, here is why now may be a good time to jump in.

While sales have dropped on new condos, listings on resale condos have not stopped and while the slow sales have led many builders to hit pause on their projects, inventory is currently at a historic high. That means you have options as a buyer — lots of options — and competition in this market is limited for the time being.

There are also a lot of motivated sellers at the moment, including investors and builders themselves. Some of the latter are offering upwards of hundreds of thousands of dollars worth of incentives. That includes things like reduced closing costs, favourable financing opportunities, as well as things that add value to condos long term like parking spots, premier finishes, and more.

Which leads us to the million-dollar question: why aren’t prices budging? It’s true that Toronto condos — like homes in Toronto generally — remain expensive for many people, but that is in part because they are expensive to build. Costs have gone up considerably for builders and the cost of borrowing has affected them as well. Higher mortgage rates for purchasers are governed by the same interest rates that affect builders trying to secure financing to complete their projects.

But those costs are coming down. The Bank of Canada recently reduced its overnight rate to 4.25%, the third consecutive reduction. Those rates are expected to come down further but as they do, it is expected that more buyers will enter the market. Toronto remains an exceptionally popular city for real estate. When market conditions become more favourable, competition will increase, and prices will likely rise again.

As we mentioned, it is impossible to know when the market will be most favourable but as the old adage goes, it’s less about timing the market than your time in it. Condos in cities like Toronto offer a fantastic quality of life and, long term, often prove to be resilient investments despite fluctuations in the market.

If you are looking for professional guidance, talk to our experts at Spectrum. They can help you find the right opportunities for your circumstances.