Toronto's luxury neighbourhoods have seen real estate value drop by up to 30%
The COVID-19 pandemic has certainly shifted the trends in Toronto's housing market since it first arrived last March, and it seems condos in the city's most luxurious neighbourhoods are among some of the hardest hit.
According to a report from real estate website Strata, the condo markets in Yorkville, The Annex and Casa Loma have seen the biggest declines in value over the past 12 months.
"Buyers will often prioritize value over luxury when in a recessionary environment," said Strata Broker of Record Robert Van Rhijn in a statement.
"Even those who have the means to purchase high-end properties are likely to hold off. Sometimes they worry that luxury might become devalued, resulting in a wait-and-see approach."
In The Annex, according to the report, the condo market saw a 29.96 per cent drop in value, while Bloor-Yonge decreased by 11.98 per cent, Yorkville by 11.79 per cent, Casa Loma by 11.13 per cent and Bay St. Corridor by 6.31 per cent.
Findings show that condo inventory levels in all of these neighbourhoods aside from The Annex are also currently nearly double what they were during the same time last year .
Rental values in these neighbourhoods have also taken a plunge, but the report shows that nearby "non-luxury" neighbourhoods have increased in value: The Junction by 11.33 per cent, Leslieville/South Riverdale by 5.16 per cent and Regent Park by 5.67 per cent.
"The Junction and Regent Park are still gentrifying, so I'm not startled to see values increase as cautious buyers hunt for better deals," Van Rhijn said. "Look, even during lockdown periods, we're seeing bidding wars in these areas."
Sam Massoudi, a real estate agent with Strata who has investor clients in hard-hit luxury neighbourhoods, meanwhile says many of them relied on wealthier international students as tenants for years, but have since been forced to sell since virtual learning means foreign students can attend Canadian schools from abroad.
"I have investor clients who were once so proud to own a property in a luxury neighbourhood. But they had no idea a pandemic like this was going to hit and drive immigration out of the city," Massoudi said.
"So now some of them have sold. For those who didn't, they're renting these places out for very cheap. That's why we're seeing such low rents in some luxury areas."
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