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Question: I heard one of the bank economists online saying that there was only a four or five-month supply of new condos on the market in Toronto, but that buyers should wait a little longer to see if prices come down any further. It seems to me that prices are bound to bottom out soon. Do you think I should wait?

Answer: There has been on and off speculation for some time that the hot Toronto condo market is bound for a slowdown. But reports on the future of the real estate market always differ. On one hand, you have some media reporting doom-and-gloom scenarios while others remain optimistic about future growth in the condo sector.

Markets do fluctuate and nobody knows when peaks or valleys will begin or end. The one thing that's certain is that the Toronto market has continuously taken hits and bounced back over time.

But if you are in the market for a new condo, you have to ask yourself a simple question: "Why exactly am I buying?"

Whether you're looking to buy a place you plan on living in for a number of years, or to rent out as an investment property, the market will likely fluctuate up and down throughout the time you own it. You can't control that, and there are no guarantees, but over time you should realize value.

Sure, the market may bottom out in a month or six. You will still have likely gained some equity, and you can expect to see significant growth in the long term based on past trends.

Look at all the major financial market indices. The Dow Jones and S&P 500 have taken major hits in bad markets, yet people who held their positions are better off than they were before markets crashed, corrected, declined or whatever you want to call it. But that underlines there are many options for where you put your money – real estate, the markets, precious metals, under your bed…

It all boils down to opportunity cost – the cost of NOT making the investment in real estate or another asset. That is something I cannot answer for you; your choice as to the best place to put your money for growth requires some soul-searching on your part. It's not surprising that I would encourage investment in real estate, but I find an asset you or a tenant can live in beats one that's on paper. Everyone needs a roof!

Let's get down to brass tacks and look at some numbers relating to the Toronto market.

In Toronto, resale condo units were down 16.9% in the first quarter of 2013 versus the same period last year. Prices were relatively flat year-over-year (0.5% decrease), with the average condo price hovering around the $333,000 mark in Q1 2013 (Source: TREB Condo Market Report Q1 2013).

New condominium completions were in a steady decline for the majority of 2012. However, in 2013 they've resumed an upward trajectory. Canadian Housing and Mortgage Corporation (CMHC) is estimating approximately 17,000 new condo units in 2013, compared with 11,000 last year. That's a lot of condos coming on stream, but many are destined to be bought by investors and enter the rental market where, according to a report this week by Toronto-based condo research firm Urbanation, average rents have hit a record $1,856 a month.

So, active listings will likely remain high compared to previous years. No one can predict what that will mean for prices, but you will have a broad choice and can expect some competition in cost and the ability to negotiate.

Everything still boils down to that basic question: "Why am I buying?"

If you are moving for personal reasons such as quality of life improvement, you may not want to wait. If you are an investor looking to acquire a rental property, then urgency may not be a factor – there is clearly choice and opportunity. That said, waiting would also be a delay in your opportunity for monthly rental cash flow and a start to building equity with your newly acquired asset.

As always, the marketplace is never the over-riding factor – your choice must be based on what works for your own housing and financial needs.

Ricky Chadha is a broker with Royal LePage Estate Realty in Toronto, and specializes in applying social media and other digital tools to the business of real estate. You can find Ricky on Twitter @your416 or at his website

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