Liberty Village Condo Sales May 2023
Welcome to June! It’s been a weird month so far – with the wildfires, air quality, odd Summer weather and recent interest rate hike. On the positive side… it’s Summer! How do we always end up talking about weather? Let’s talk real estate!
This month, we saw an increase in condo sales year over year and month over month. For sales volume, we saw an increase in prices year over year and month over month. Let’s delve into the numbers for our Liberty Village condo market in May and let them do the talking.
How Many Condos Sold in Liberty Village In May?
May 2023 saw a total of 42 condo sales in Liberty Village. In comparison, May 2022 saw a total of 24 condo sales- a 75% increase. If you’ve been following our monthly stats updates, you might be scratching your head. How could this be? Let’s take a look at the overnight lending rates. In May 2022, the overnight lending rate was 1% – on April 13th, 2022 the rate increased from .5% to 1%. Now, historically, demand tends to decrease as the overnight lending rate increases. We saw that the beginning of 2022 was an extremely over-active real estate market. Then, as the year went on, the market continued to adjust as overnight lending rates continued to rise. Fast forward to April 12th, 2023 and the overnight lending rate was 4.5% (no change since January 25th, 2023). You might think – if the overnight lending rate was 3.5% higher, why were there 75% more sales? We’ll tell you exactly why. If you’ve also been following projected interest rates in the news, you’d know that there was talk of another interest rate hike in June. And the experts were exactly right – on June 7th, 2023 a .25% change was announced, hiking the overnight rate up to 4.75%. So, if you were able to secure a mortgage at a lower rate, would you do it? The obvious answer is yes. So, we can assume that the projected rise in the overnight lending rate, at least partly, contributed to the sudden yearly jump in sales.
Month Over Month Changes
When looking at condo sales month over month, April 2023 had 24 sales. That’s a 75% increase in condo sales month over month. We talked about how the market can adjust when demand raises or lowers during a particular month and we definitely saw this happen this month. Last month, we had a 40% decrease in sales month over month, and this month, the market jumped right back. Now, we touched on why this likely happened in the previous section – the experts predicted that interest rates would jump in June 2023. Those who could secure the 4.5% overnight lending rate (as opposed to the projected 4.75%) did so quickly.
To sum it up, condo sales in May increased year over year and month over month and the number of buyers confident enough to make their biggest lifetime purchase almost doubled – we explained our thought process above, but would love to hear your thoughts the comments below!
Mortgage Rate Forecast Canada 2023-2024
Now, looking forward, what are the experts predicting? Perch predicts the following:
- Fixed rates will increase in June, with variable rates remaining steady
- Long term mortgage rates will trend towards 4%
- The Bank of Canada is anticipated to cut rates by 2% over 2024 and another 1% over 2025 and adjustable rate mortgage holders will see lower payments
- Bank of Canada will announce another hike of .25% before the end of 2023
The current market overnight interest rate forecast for the next 12 months is:
- No change July 12th, 2023
- No change September 6th, 2023
- A 0.25% increase October 25th, 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 May 2022 to May 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 May 2023 was $781,905 on the 42 sales. The average sale price for the sales in May 2022 was $834,688 on the 25 sales. A 8.06% year over year decrease in sale prices. This means that buyers, this year, got a 8.06% better deal than buyers last year. Like we said earlier in the blog post, purchase price savings (especially this month) were not and have not been enough for the market to bounce back to 2022 levels. We have to look at the full picture, and this full picture includes interest rates. We’re going to sound like a broken record, but if interest rates are 4.75% higher than they were last year, 8.06% lower sale prices aren’t going to cut it.
The average sale price in May 2023 was $781,905 on the 42 sales. The average sale price for the sales in May 2022 was $834,688 on the 25 sales. A 8.06% year over year decrease in sale prices. This means that buyers, this year, got a 8.06% better deal than buyers last year. Like we said earlier in the blog post, purchase price savings (especially this month) were not and have not been enough for the market to bounce back to 2022 levels. We have to look at the full picture, and this full picture includes interest rates. We’re going to sound like a broken record, but if interest rates are 4.75% higher than they were last year, 8.06% lower sale prices aren’t going to cut it.
Now, what about sales pricing month over month? The average sale price in April 2023 was $745,538 on the 24 sales. A 4.88% month over month increase in sales price. We had an increase last month, but this is an even bigger increase. We’ve seen that the Spring real estate market has had minor month-over-month increases – this is to be expected. We also mentioned that as we got deeper into the Spring market, we’d see slightly increased price increases – we were spot on. Going into the Summer, we predict that the price increases will have even smaller increases as the months go on. Especially with the most recent interest rate hike, this will have an even bigger impact.
The Liberty Village condo market for the fifth month of 2023 is slowly and steadily increasing in price (month over month). This month, we saw ALL increases – month over month, year over year, both in condo sales and condo prices. We keep on mentioning that this year is going to be a rollercoaster ride and we definitely have been going up and down with rising rates and prices. What are your predictions for the early Summer market? Let us know in the comments below.
Curious how May 2023 differed from the year before? Take a look back at our post for the Liberty Village condo stats in May 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.
