2010 was year of the Toronto condo
By Tony Wong – Toronto Star MoneyVille
High rise condominium sales in the Greater Toronto Area accounted for more than half the new home sales last year for the first time ever, according to figures released by RealNet Canada Inc.
“The popularity of condos has been an increasing trend that we have seen over the last decade,” said George Carras, president of RealNet .
High rise sales accounted for 52% of all purchases last year, compared with 42% in 2009. Affordability issues, along with a lack of buildable lots for low rise development have helped condos become the popular choice with new home buyers.
“Within the last decade, the share of the GTA housing market captured by high rise condo developers has risen steadily from one quarter, which was considered normal, to a third, which was called the new normal,” said Building Industry and Land Development president Stephen Dupuis. “To the point today where more than half of all new home sales annually are high rise.”
Dupuis notes that when condo sales hit the 40% level some builders dubbed that the year of the condo. But this is the first year on record that condos officially passed the half way mark.
All that condo building has some analysts worried that there is a massive oversupply in the works. Analysts have been warning that there could be a correction in prices as a result.
So far that hasn’t happened.
Carras says one problem is structural. Builders are going flat out, but they can only put so much supply on the market.
In 2010 there were 15,874 occupancies for high rise buildings, about average for the decade.
“They’re not sitting idly by. But they only have so many resources. It’s not like you’re Ford Motor Company and you can put on an additional midnight shift. So the supply is not coming on as fast as the demand,” says Carras.
That has helped to hold prices up, at least so far.
New home prices also hit new records at the end of 2010.
Average prices of single detached homes exceeded the $500,000 threshold, closing the year at $503,190.
Condominiums passed the $400,000 threshold, hitting an average price of $441,663.
Many of the recent sales have been to foreign investors from Asia and the Middle East. There is some concern that units will ultimately come back on the resale market if investors do not see price appreciation, or if they are unable to rent their properties because of a glut.
Part of the popularity of condos though is by default. Low rise sales have taken a hit because builders have had trouble finding lots. Another complaint has been red tape at city hall in getting project approvals.
“You can’t sell what you don’t have,” says Carras. Sales of low rise homes decreased by 10% over 2009, facing the second worst year since 2000.
Overall, 2010 sales were up by 8% to 33,996 units compared with 2009.
However, that makes it the third worst year since 2000.
The low was in 2008 was when the recession hit hard and consumers were paralyzed with indecision. Sales plummeted to 26,768.
In terms of builder sales, Mattamy Homes, had the biggest year selling 1,815 new homes.
Monarch Homes was in second place at 1,403 and Tridel Corp. came in third at 1,277.
Contact the Jeffrey Team for more information – 416−388−1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
- Toronto Real Estate Forecast 2010 MLS® sales in the GTA will hit a record high…
- Toronto Real Estate 2009 Year In Review Sales growth in the Toronto Real Estate Board’s different districts…
- Record year for condo sales Urbanation reported 20,964 new condo sales throughout the Toronto CMA…
- 2010 Toronto real estate trends When it comes to the Toronto condo market in 2010,…
- 2010 will see Toronto MLS listings rise In the latest month end report, the Toronto Real Estate…