How the real estate market has been trending
There are different markets within a market and most real estate agents and experts will agree to this fact. Average prices reported on by the real estate boards talk about the overall market whereas specific data is what matters the most when it comes to buying and selling properties within local markets.
That’s why it is most important to work with a trusted local professional to get best results when buying and selling.
Let’s talk about the local market of Mississauga Condos and Square One Condos in general. We will talk about how the prices were performing pre-covid, and at present.
For the future, we do not know what may come, and no one can predict it. It all depends on when the COVID 19 vaccine comes, any further lock-downs or other complications that might surface.
So first let’s talk about pre-pandemic time, where we will compare prices with same time last year.
Feb 2019 to Feb 2020 Condo Market Growth
In Feb 2019 Average Mississauga Condo Price was $445,854
In Feb 2020 Average Mississauga Condo Price: $547,524
So we saw an average growth of 23% between Feb 2019 and Feb 2020 prices.
Mississauga Condo trends both pre-covid & during covid – Mar 2020 to Sep 2020
During Jan 2020 to Mar 2020, we were receiving 5-6 offers on every property and it appeared as if we were reaching 2017 levels where everything was selling and that became a regular norm.
As soon as the pandemic hit, there was a lull in the market.
Activity almost stopped for a month and people stopped buying and selling, it was sort of a panic situation. But immediately after lock-down was lifted, things started moving and people started buying. There was good activity in the market as interest rates had dropped and people were buying and selling homes. Most of these people were selling their condos to buy low rise properties like townhouses, semis and detached homes in urban areas.
Here is a comparison of number of sales between May & Aug of this year vs. last year:
Number of condos sold in Mississauga from May-Aug 2019: 1103
Number of condos sold in Mississauga from May-Aug 2020: 773
Rental Inventory Increased in Mississauga and all across the GTA
During these past 5-6 months there were negligible flights coming with newcomers, work permit holders etc. Many new immigrants have been forced to put a hold on their entry to Canada until 2021. As a result, the inventory on rental units has increased.
This has changed the scenario for investors. Rental vacancy rate has jumped up and rents have dropped by almost 10% from Mar 2020 to Sep 2020. Last year in July, 1 BR rented for approx. $2,100, this year in July the rent was approx. $1900.
The situation is worse in Downtown Toronto where an average rent for a 1 BR has dropped to $1700 per month.
Understandably, the vacancy rate has made investors uneasy hence, not many investors are seeking to get into the housing market. Now this is about average investors and not for savvy investors who like to seize upon an opportunity.
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”―
We have had investors in the last 2-3 months who have bought Mississauga and Downtown Toronto condos at a discount. In the last two months, prices which were hovering in January/ February at around $510K for 1 BR and $575K for 1 BR + Den Mississauga condo or $670K for 2 BR Mississauga condo, have now dropped to $485K, $530K, $565K respectively, as of Sep 2020.
This can be a great opportunity!
Everything is still renting as long as you price it right. So instead of choosing to keep their units vacant, smart landlords have opted to bring their rents down by 10% to 15%, as compared to 2019 rental rates. Even with a slow down in the rental market, there are tenants who are shopping for good deals as many are moving out of their current leases and shopping for new lower rents. Some new immigrants are arriving who are moving into these properties.
Having said this, there are about 475 condominium apartments listed for lease in and around Downtown Mississauga (City Centre, Cooksville, Hurontario & Mississauga Valleys) and some 4,400 condo apartments are listed for rent in Downtown Toronto (C1 district) right now at the time of this blog post (Sep 2020).
What is Per Square Foot Price at Square One?
Each building has its own Price Per Square Foot (p.s.f.) and it does not mean that p.s.f. is a thumb rule for all buildings or all condo types. Hence it is not right to assume that a 3 BR condo will have the same p.s.f. price as a 1 BR condo or the price per square foot in one building will be equivalent to price p.s.f. at another building.
Recently we showed a penthouse condo suite listed at $900,000 and about 1,700 sq ft in size. The p.s.f. price with two parking spots is about $529 p.s.f. And one of our investors bought a 1 BR in 600 sq ft size for $485,000, which comes to $808 p.s.f.. And we will soon list another 1,000 sq ft unit in an older building for $510,000, so this price comes to $550 p.s.f.
Hence p.s.f. price should not to be taken as a thumb rule when shopping for a condo. Learn more about how price per square foot works.
Builder Condos in Mississauga
Mississauga builders are pricing their condos around $1000 p.s.f. In 2020 we have seen many new launches. Find out what can be the best option; a builder condo or a resale condos.
Downside of COVID 19 Pandemic
Economic impact as a result of COVID 19 and the housing market.
Interest rates are at an all time low and housing inventory is down (lack of listings) which is helping prices to move up. But if economy deteriorates in the near future then we can have a major housing market crash. Time will only tell. Let’s hope for Corona to go away soon.
We’re only now beginning to realize the extent of the economic impact of COVID-19, especially on middle income families. So many people have lost their jobs and are slammed with financial challenges. For both landlords and tenants, the COVID-19 pandemic has become a nightmare. Even though landlords cannot evict tenants who cannot pay their rent, this will not go on forever. The rents will have to be paid somehow or people may be forced out of their homes eventually. For families who are stuck with mortgages or rents and no job at present, this is a very challenging time indeed.
How are markets looking outside of Mississauga?
Well there is a lot of activity in the first time buyer market. The market is very hot. We have seen many multiple offers in price ranges of anywhere from $600,00 to $1 M. Homes are selling in no time. The market is very hot for homes in Milton, Burlington, Oakville and Brampton in almost all price ranges. Our team has helped first time buyers buy nice freehold homes and condos Mississauga, Milton, Burlington recently.
In addition to these markets, as per the latest REMAX Canadian Real Estate Fall Market 2020 Outlook, many buyers are looking to move to smaller towns & cities to order to be able to buy larger homes with additional features like a pool or backyard. Read more in our blog post: 2020 Fall Market Update.