The spring weather seems to be here to stay, which means the spring real estate market is already in full force. Several significant factors have impacted the market this past month, including the return of people to downtown offices, lack of new listings, and the first of many anticipated interest rate increases.
Over the past few weeks, anyone in the Financial District can comment on how the PATH has come alive again. This resurgence has led to many buyers exploring the options of moving back downtown and many corporate relocations finally taking place that were on hold during the pandemic. In the beginning of March, the Bank Of Canada announced an interest rate increase from 0.25% to 0.5%. Although not a significant rate increase, there will likely be continued increases, which has led buyers to consider whether it is worthwhile to buy before any further hikes.
These are two of the critical factors leading to the strong demand for luxury properties throughout the month. There were 24 properties sold above $2m in the city, most of them in the downtown core. The strong demand has led to significant increases in the average sale price, up 27% from March 2021, and the average sale on a per square foot basis, up 19% from last year.
The number of new listings coming to the market continues to lag behind the demand leading to more and more competition at these higher price points. For one of the first times ever in this market sector, the strong demand led to the average sale price exceeding the listing price by roughly 3%.
Buyers are returning to the luxury condo market in full force, but the lack of inventory has increased competition among buyers and led to substantial increases in sales figures. As we push into the spring months, it will be fascinating to see if an increasing number of new properties can satisfy the demand from buyers.
For more information on the market or any questions you may have on what to expect over the next few months, please feel free to give me a call or send an email.
Dylan Donovan, Broker
Chestnut Park Real Estate
*Numbers are based on condo apartment above $2,000,000 in area C01, C02, C08 & C09 between March 1st and March 31st, 2022 as reported by the Toronto Real Estate Board.