But the Toronto Real Estate Board is still forecasting that the average price for all types of homes in the GTA will rise from its current $510,580 to $515,000 during the year. That’s a phenomenon that’s helped in part, the home-building industry says, by the restriction of the supply of detached homes created by regulations and land constraints including the greenbelt.
And a number of observers speculate that the market is already beginning to bounce back from the softening.
“We’ve seen sales levels slow down since the summer, but since January, February, we’ve actually seen the monthly trend begin to stabilize,” Mr. Hildebrand says. “When you look at things on a monthly basis, you start to see a bit of momentum actually being added back into the market.”
Condo developers are luring buyers into buildings that are about to undergo construction with incentives such as lower down payment requirements, free initial maintenance fees, or even guaranteeing that they’ll find a tenant to rent the unit – or else pay the rental costs – for the first two years.
Despite that, Oliver Baumeister von Bretten, a broker with Re/Max who specializes in Toronto condos, has yet to see a significant resurgence among first-time buyers in the lower end of the market. “They’re coming back, but very cautiously,” he says. “I had a guy ready to buy in Queen West and then he said, ‘with the condo bubble coming I think I’ve got to rent for another year,’ ” adding that this segment of the market appears to be more highly influenced by comments from policy makers and economists.
Tara Perkins, Toronto
MONTREAL: TRENDING TO A BUYER’S MARKET
Avigail Aronoff always loved the character of Montreal’s old houses and apartments – the original crown moulding, the history, the hardwood floors. But when she set her budget for her first home purchase, she also had to decide if she was willing to pay another price.
“Do I really want crown moulding or do I want my bed to stay put?” Ms. Aronoff said. “There’s so much there that is so quaint and lovely. And then you get in and you start looking at it like a buyer, and you realize, oh except this corner of the room is three inches lower than that corner of the room.”
So she decided on a newer place, cautious about having to invest later in replacing aging pipes or grappling with structural issues. On Monday, Ms. Aronoff received the keys to the two-bedroom condo that made her a first-time homeowner. Like many apartments in Montreal’s Plateau neighbourhood, it’s a duplex divvied up into units, and the place came in right on the budget she set for herself, in the low $300,000s.
For the agents involved, it’s a welcome piece of business. Montreal’s market has shifted into a lower gear. There’s a lot for sale – there were 28,824 active listings in January, 9 per cent more than the year before – but fewer deals are getting done. Total sales were down 14 per cent in the month, and prices are basically flat.
That’s a shift. Condo prices had increased nearly every month since August, 2009, according to the Greater Montreal Real Estate Board, but they aren’t rising now. And it all points to a subdued year for the Montreal market. “The single-family home market is becoming balanced and the condominium market is leaning towards a buyer’s market,” Paul Cardinal, the analysis manager at the Quebec Federation of Real Estate Boards, said in a statement.
Ms. Aronoff’s decision to buy was the result of a number of factors. After she began her search in earnest about six months ago, there was rarely a Sunday when she did not find an open house she wanted to check out. She was tired of renting after 10 years, is financially stable on her own, and her grandmother left her some inheritance but stipulated it could only be used toward buying a primary residence.
“I always look at houses. I’m a house porn addict,” she said, laughing. But the habit led her to have realistic expectations of what she could afford.
She was surprised by how easy the process of finding her first home was. The daunting part, she said, is all the expenses that come after it, including moving, painting and other small projects, the municipal tax increases to come, and Montreal’s real estate transfer tax. “Just watching the money fly out of your wallet, it’s unbelievable.”
There’s just one regret. “I’m just sorry I didn’t wait to buy until after the provincial election,” she said. “In Montreal, the PQ isn’t great for housing prices.”
Editor's note: Canada Mortgage and Housing Corp. looks at the proportion of Toronto house sales below $400,000 as a measure of the number of first-time buyers. In 2012, that proportion fell to 45 per cent, down from 52 per cent in 2011. An article on Saturday incorrectly described that $400,000 figure as a median price.