Liberty Village Condo Sales March 2023
Hey April! How’s it doing? I, for one, have been very pleased with the weather. Lots of sunny days to account for, a few colder days, but mostly warm. It’s feeling more and more like Spring, and almost Summer. As much as you’d probably like to hear about how the seasons progress, let’s move on to real estate. That’s why you’re here, right?
This month, we saw a decrease in condo sales year over year and an increase month over month. For sales volume, we saw a decrease year over year and an increase month over month. Let’s delve into the numbers for our Liberty Village condo market in March and let them do the talking.
How Many Condos Sold in Liberty Village In March?
March 2023 saw a total of 40 condo sales in Liberty Village. In comparison, March 2022 saw a total of 53 condo sales- a 24.53% decrease. If you read last month’s blog post, you’ll know exactly why this is. If we look at the interest rates in March 2022 vs March 2023, we’ll see that the Bank of Canada had an overnight lending rate of .50% in March 2022. March 2023 had an overnight lending rate of 4.5%. This is a massive 4% increase in interest rates year over year. Now, you can understand why condo sales dropped by almost 25% year over year – purchasing power is substantially less when interest rates are 4% higher year over year.
Month Over Month Changes
When looking at condo sales month over month, February 2023 had 25 sales. That’s a 60% increase in condo sales month over month. Well, one way to account for this is to explain peak seasons in real estate. While 2023 is an uncharacteristic year (and all of the months during the pandemic have been uncharacteristic), it seems that Spring is always a peak month in real estate. So, it makes perfect sense that there would be a surge in sales for March 2023. We also know that the overnight lending rate remained unchanged from last month at 4.5%. Most people will take advantage of an unchanged rate, in comparison to all that interest rate increases we recently saw. We’ll talk about prices later on in this blog, but, year over year, buyers are actually getting a deal on purchase price – this is a huge incentive to buy. A few years ago, you’d be hard pressed to find a “deal” in the Toronto real estate market, with most people calling you “crazy” if you thought you were getting one. So, people are taking advantage of this one in a million chance. Let’s also not forget that pre-approvals expire, and those that want to take advantage of their pre-approval rate, would have to have done so – that may also explain the raise in condo sales month over month.
To sum it up, condo sales in March decreased year over year and increased month over month and the number of buyers confident enough to make their biggest lifetime purchase was an impressive number (especially month over month).
Mortgage Rate Forecast Canada 2023-2024
Now, looking forward, what are the experts predicting? Perch predicts the following:
- Expectations that rate hikes are done for the remainder of the year look all but certain at this point.
- Fixed rates will lower in April, with variable rates remaining steady.
- When interest rates eventually come down again it’s likely the increased demand will bring the housing market back to where it was pre-2022.
The current market overnight interest rate forecast for the next 12 months is:
- No change June 7, 2023
- No change July 12, 2023
- No change September 6, 2023
- A 0.25% decrease October 25, 2023
- No change December 6th, 2023
Condo Prices
Sales volume tells us part of the story. Let’s look at prices. Did values increase, remain the same or decrease from March 2022 to March 2023? Let’s take a look at the average sale price for all types of condo sales year over year.
The average sale price in March 2023 was $731,617 on the 40 sales. The average sale price for the sales in March 2022 was $784,316 on the 53 sales. A 6.72% year over year decrease in sale prices. Now, this means that buyers in March 2023 got, on average, a 6.72% better deal on their purchases than buyers did in March 2022 – now, that’s pretty dang good. We also have to take into consideration the difference in the overnight lending rate – as we talked about earlier, the rate was 4% higher in March 2023 than in March 2022. We did a quick mortgage payment calculator to understand how overnight lending rates, in combination with purchase price, affects monthly payments. Let’s take the average sale price in March 2023 – $731,617. Now, let’s use the 4.5% interest rate (to reflect March 2023). with a 25 year amortization. This gives us a monthly payment of $4,066.57. For all the same terms listed above, but a .5% interest rate (to reflect March 2022), the monthly payment would be $2,781.74. This is a gigantic $1,284.83 difference in monthly payment, despite the purchase price being $52,699 lower in March 2023. So, while prices may be 6.72% lower, this largely does not balance out the 4% difference in the overnight lending rate.
The average sale price in March 2023 was $731,617 on the 40 sales. The average sale price for the sales in March 2022 was $784,316 on the 53 sales. A 6.72% year over year decrease in sale prices. Now, this means that buyers in March 2023 got, on average, a 6.72% better deal on their purchases than buyers did in March 2022 – now, that’s pretty dang good. We also have to take into consideration the difference in the overnight lending rate – as we talked about earlier, the rate was 4% higher in March 2023 than in March 2022. We did a quick mortgage payment calculator to understand how overnight lending rates, in combination with purchase price, affects monthly payments. Let’s take the average sale price in March 2023 – $731,617. Now, let’s use the 4.5% interest rate (to reflect March 2023). with a 25 year amortization. This gives us a monthly payment of $4,066.57. For all the same terms listed above, but a .5% interest rate (to reflect March 2022), the monthly payment would be $2,781.74. This is a gigantic $1,284.83 difference in monthly payment, despite the purchase price being $52,699 lower in March 2023. So, while prices may be 6.72% lower, this largely does not balance out the 4% difference in the overnight lending rate.
Now, what about sales pricing month-over-month? The average sale price in February 2023 was $725,970 on the 25 sales. A 0.78% month over month increase in sales price. This is a pretty small increase, but it’s an increase, nonetheless. We mentioned that as we’d get deeper into Spring, we’d see prices increase and transactions increase. We’re not going to see a crazy huge increase in month over month prices, simply because interest rates are extremely high, comparatively. We said this before and we’ll say it again, interest rates are going to have to take a much deeper plunge in order for the market to return to 2022 transaction levels.
The Liberty Village condo market for the third month of 2023 is slowly and steadily increasing, both in price and transactions (month over month). We predict that April stats will show a slight price and transaction increase as well, month over month. If we’re talking rollercoaster rides, like we always do, we’re climbing, slowly but surely. But, unlike how rollercoasters usually work (down after up), hopefully the upward projection continues! What are your predictions for the remainder of the Spring and early Summer? Let us know in the comments below.
Curious how March 2023 differed from the year before? Take a look back at our post for the Liberty Village condo stats in March 2022.
If you have any specific questions about the market or are curious as to how this relates to your Liberty Village condo, get in touch. You can fill out our Condo Value Form or send us an email.
