Half of 2018 is behind us, and the market is leaving some behind as well. As savvy real estate investors, we have to look at the market in a new light. Most investors and real estate agents look at the market with a simple $ per square foot formula. However, as the Toronto market evolves into an "investor buying only" market, simple formulas are not enough.

I would like to introduce you to "CONDO CONFIGURATION", which is a new way I have been studying the market this year. By "CONDO CONFIGURATION" I am implying to the configuration of bedrooms to dens to baths. Since last year, some of investors "gambled" on the prospect of leasing dens as bedrooms. These two young investors, bought 1 bed plus den condos at FLY condos last year. One of these condos is coming up for rent, and we are looking to rent out the condo for $2600 without parking! This is a 680 square feet, 1 bed plus den with 1 bath.

Earlier this year, another investor bought a 1 bed plus den with 2 full baths at Studio Condos (199 Richmond Street West) and is renting that unit for $2800 with parking. The numbers for 2 bedroom, 2 bath condos are even more impressive. We have recently leased some 2 bedroom, 2 bath condos at 300 Front for $4000 with parking. And 2 Bedroom and den with 2 full baths at Charlie (8 Charlotte) for $3500 without parking.

The point I am trying to make is that square footage only is not a deciding variable for how much a condo should sell and rent for. Although there are so many factors that dictate value, such as building, year of build, type of construction and tenant demographic. I have gathered the numbers by configuration of the condos sold from 1st of January, 2018 to 30th of June, 2018.

There are four main configurations that dominate the market, but I am going to concentrate on five of them. They are:

1 Bed with 1 Bath
1 Bed plus Den with 1 Bath
1 Bed plus Den with 2 Baths
2 Beds with 2 Baths
2 Beds with Den and 2 Baths

Here is a look at the number of sales for each of these configurations since January, 2018.

As you can see, the 1 Bed with 1 Bath and 1 Bed + den with 1 Bath, dominate the market. Let's have a look at the average prices for these configurations:

As predicted, the prices for your conventional one bedroom with one bath condos, has increased by $40,362 from January to June. That is at a rate of 16% for a full year.

This upward increase in price trend continues for the 1 bedroom plus den with one bath condos. They have increased on average by $42,979 from January to June. That is a 14% increase for a full year.

For quite a while now, I have been insisting that two bedroom condos are a configuration that will become very hard to attain. There are several reasons, however, the main one being the difference in price from a two bedroom condo to a freehold 3 bedroom property in the core. The increase in price for these two bedrooms with two baths condos is the highest. The average increase of a two bedroom condo with two baths has increased by $118,021 from January to June. That is a staggering 27% increase in price for a full year.

If you are looking to purchase a condo in the downtown core, please do not try to time the market. We are only experiencing the beginning of Toronto becoming a "Investors Only Market". There are rumours about the new government eradicating the foreign buyer's tax. We have now seen the effects of the new "stress test" mortgage rules in Toronto. All these factors are leading to Toronto becoming an investors haven.

I am attaching the numbers for all the condo configurations in the market, for you to review.

Here are the average prices for all configurations from January, 2018 to June, 2018

Looking to Invest

Let’s Schedule a meeting