Mississauga Condo Market in 2018.Written by Eric Skicki Sunday, January 14th, 2018
2017 was an interesting year in GTA real estate to say the least. We covered in an earlier blog how home prices between January to April skyrocketed by 10-15%. After the April 20th new mortgage rule announcement the market seemed to have take a turn. Here is what happened since then.
Depending on the area, the amount of homes for sale at any given time went double or even triple what they were earlier in the year. Prices have taken a dip also. The biggest change was experienced by homes priced over the $1.5m mark, dropping in some cases as much as 20%.
Over the past few months I visited many presentation centers for new homes and it’s clear that new homes are not selling like they used to. Big builders such as Mattamy Homes, got accustomed to selling out entire phases over one weekend, and now are barely selling any houses. New townhomes have taken a noticeably less downturn, but are still not moving as fast as before.
Condos listed on MLS seemed not to be affected by the new mortgage rules. Regardless of location, size or even sometimes condition, condos which are well priced do not last long on this market. Many first time buyers are surprised to see the low inventory levels. Some of the popular buildings in Mississauga, such as Onyx or Chicago Towers, only have 1-2 available units listed for sale at any given time.
If there is any segment of the market that almost benefited from the recent mortgage rule changes, it’s the new condo market. Average PSF (price per square foot) in Toronto went from the mid $600s to the mid $800s+. Which means a small condo with a parking spot in Toronto can cost anywhere between $500-600k. Mississauga has also seen price increases where $600+ PSF is the new normal.
Why is the above happening?
The answer is simple. Affordability. For the vast majority of buyers, detached homes are simply out of financial reach. Under the new mortgage rules, buyers must qualify for all real estate purchases as if the mortgage interest rate was 5%. This can easily add up to 20% more on your monthly mortgage payments.
For the same reason, in 2017 and going on into 2018, the mainstream way to invest into residential real estate will remain as condos. Not only do condominiums see better cash flow (than detached homes), and healthier appreciation, but are also much easier to rent.
What is interesting to note is that, for the past five years or so many “real estate gurus” and media publications, positioned condos as the more “riskier” investment over stand alone homes. There was a sentiment that condos were over built and overvalued. As we have seen last year, the exact opposite unfolded, and condos turned out to be the winner.
What to do in 2018?
I still believe that the best long term real estate investment one can make is a pre-construction condo. Some of our clients who bought in previous phases, such as Grand Park 2, PSV and Crystal, have seen over $100k in price appreciation over the past few years. There is a high demand on the rental market for these condos and they usually get rented within a week or so.
Regardless if you’re a first time buyer, a downsizer planning for his/her retirement or an experienced investor, I recommend you reach out to us and we can find you the best condo for your needs. In 2018, we have quite a few launches in Mississauga. So far we announced – Highlight condos, Edge Towers (2nd release) and Avia. Stay tuned for more!
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Sunday, January 14th, 2018 and is filed