Last month we focused on the shortage of condos available for sale and we predicted that we would see the impact of that statistic on prices this month and that's exactly what we've seen.

The median price of a condo in September increased to $452,000 from $432,950 the month before. That's a significant jump and it's due to a lack of condos available for sale. There is steady demand of about 500 suites selling each month but the supply of only 717 units on the market is almost half of where it should be, best explained in the following graph:

There should be around 1250 condos for sale at this time of year but we only have 717 right now. This shortage results in bidding wars and rising prices. Nice suites priced accurately typically sell in less than a week or choose the bidding war process and have 3 to 6 offers on average.

Although this graph shows a slight decline in the Supply Demand Ratio, it's still far above typical and will keep the pressure on prices. Unless we see a significant increase in the number of condos coming to the resale market or the Buyers cool down, we're expecting to see higher prices next month. One factor mentioned in the media which may have an impact is more stringent mortgage qualifications to come. This is described as 'stress tests' which will ensure Buyers can carry their mortgages at higher interest rates. We believe the tightening of mortgage lending will slightly reduce the affordability of Buyers... will that be enough to have an impact on prices?

We don't think so.