Downsizing baby boomers and young professionals are the two main cohorts currently searching for a condo in Toronto with a view of Lake Ontario, real estate agent Luke Dalinda says.Fred Lum/The Globe and Mail
In Toronto’s west end, sellers are adding listings to a brimming pool of inventory for condos on the waterfront.
“There’s definitely a herd mentality,” says Luke Dalinda, real estate agent with Royal LePage Real Estate Services, explaining that owners are prompted to list when they see a neighbour’s unit pop up for sale.
“This herd mentality really costs people a lot of money.”
Downsizing baby boomers and young professionals with flourishing careers on Bay Street are the two main cohorts currently searching for a condo with a view of Lake Ontario, he says.
“They’re doing very well financially,” he says of the buyers he sees most often.
Investors have disappeared and many first-time buyers are still waiting on the sidelines.
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Sellers hurt their own prospects when there are too many listings competing for the attention of a discerning buyer pool.
In Humber Bay Shores, where Mr. Dalinda concentrates much of his business, 53 sales of condo units were recorded in September while 302 units were on the market as the month wound down.
Mr. Dalinda says some market watchers are carefully watching prices and posting updates online in the area around Lake Shore Boulevard West and Park Lawn Road.
“When someone gets slaughtered with a low sale, it’s all over social media.”
That can create a false impression that all properties are selling at fire sale prices, he says.
In September, the lowest price-per-square-foot recorded in the area was $550, he says, while the highest tally was $1,027 per square foot.
Around the $800-per-square-foot mark is the sweet spot for luxury properties in the area, he adds.
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At the low end of the range, the buyer paid $1.788-million for a sprawling 3,250-square-foot condo in a 1970s building, Mr. Dalinda says. Many buyers were hesitant to take on the major renovation the suite needs.
“Not a lot of people are prepared to do the work themselves.”
At the upper end, a buyer paid $1.125-million for a unit with 1,095 square feet of interior space, high ceilings and a modern kitchen. The selling point was a large terrace facing Lake Ontario and the city skyline.
“It’s one of those mesmerizing views.”
The building is also along the stretch with cafés and restaurants on the doorstep.
But with lofty inventory in the area, many properties are languishing. Mr. Dalinda says the fear of lengthy days on market is prompting some owners to ask agents who focus on a specific building to quietly spread the word to their network that the owner is willing to sell at a certain price.
“They say, ‘we’re going to go stealth mode.’”
In September, the lowest price-per-square-foot recorded in the area was $550 and the highest was $1,027, Dalinda says.Laura Proctor/The Globe and Mail
Such pocket listings allow the seller to cast about for a buyer without the risk that the property will become stale from too much exposure. Sellers then have the option of launching on the Canadian Real Estate Association’s Multiple Listing Service if demand and prices heat up.
Mr. Dalinda says he believes the buyers stuck on the sidelines are frozen by the uncertainty surrounding the outlook for the economy.
“When you’re overwhelmed with that much information, it’s a shock and you don’t know what to do. You end up doing nothing.”
Mr. Dalinda says some buyers were encouraged by the Bank of Canada’s rate cut last month but they are hoping for more reductions.
Home sales in the Greater Toronto Area rose 8.5 per cent in September compared with September of last year, according to the Toronto Regional Real Estate Board.
The average price in the GTA stood at $1,059,377 last month, which marked a 4.7-per-cent decline from September, 2024.
According to Daren King, senior economist at National Bank of Canada, sales in the GTA edged up by 2 per cent in September from August on a seasonally adjusted basis.
That increase followed a seasonally adjusted dip of 1.6 per cent in August from July.
Mr. King notes that overall sales have recovered since the depths of March as consumer confidence improves despite continuing uncertainty.
Prices, as measured by the Multiple Listing Service home price index, stood 5.9 per cent lower in September compared with November.
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Pointing to the condo segment in the GTA, Mr. King estimates that seasonally adjusted sales jumped 14.4 per cent in September from August after an 11.3-per-cent fall in the previous month.
Across all housing types in the GTA, active listings swelled by 14.8 per cent in September compared with the same month last year and were at their highest level on record for the month.
Potential interest-rate cuts by the Bank of Canada could support real estate in the months ahead, Mr. King adds, but he remains concerned that Toronto’s deteriorating labour market and the region’s persistent affordability challenges will limit the extent of any rebound.
The central bank lowered its benchmark interest rate by one-quarter point to 2.5 per cent in September after remaining on pause since March.
At the time, Bank of Canada Governor Tiff Macklem refrained from providing guidance about rate cuts to come.
Alexandra Brown, North America economist at Capital Economics, notes that the Bank of Canada’s governing council is keeping a keen eye out for any upside surprises to inflation.
In this case, the policy-setting committee appears inclined to lower the policy rate more slowly, or by less than it otherwise might do, in order to reduce the risk of reigniting inflation.
In Ms. Brown’s view, the risks won’t be realized and the economy would benefit from another 75 basis points of cuts without sparking inflation.
Ms. Brown acknowledges that the governing council’s statements suggest they may believe that the September move was enough. But with the unemployment rate likely to head higher, Ms. Brown says, she forecasts the central bank will cut once more this year and twice in the first half of next year.
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Mr. Dalinda says some buyers are coming in with firm offers in order to negotiate a better deal on the price.
Sellers may be reluctant to accept an offer that’s conditional on financing because the length of time it takes to secure a loan is sometimes stretching that conditional period to two weeks or more from the traditional four or five days.
“The banks are driving it because they are taking longer to approve financing,” he says.
No seller wants to have their condo on hold for two weeks in prime time, he points out.
Mr. Dalinda has also noticed that buyers are increasingly paying close attention to the level of security at each property.
Until this year, buyers might make note of a 24-hour concierge in the lobby, for example, but it was never part of the conversation about which unit to buy.
These days, “everyone has a story,” he says, about a break-in or robbery that happened to them or someone they know.
“It inevitably comes up,” he says. “Now people are talking about it.”