High-rises outpace houses
By Lisa Van de Ven, National Post
“It’s pushing the limits,” George Carras says of the Greater Toronto Area’s housing market. The high-rise market is pushing new highs, adds the president of real estate research firm RealNet Canada. But the low-rise market is pushing new lows.
May set records in the new high-rise market with 2,433 new condo sales throughout the GTA (all statistics are from RealNet). That’s up approximately 50% from 1,627 high-rise unit sales in May 2010. In fact, it’s the best May for condo sales ever, says Stephen Dupuis, president and CEO of the Building Industry and Land Development Association (BILD).
While new low-rise home sales throughout the GTA were up as well this May — 24% over last year — the trend is showing fewer low-rise purchases altogether (when comparing the year to date, from January to May, low-rise was down 6%, while high-rise was up 29%).
“Builder inventories [of low-rise homes] available for consumer purchase are now at record low levels. We historically would have had over 20,000 low-rise units available in any month for consumers to buy. As of May, that’s 6,819,” Mr. Carras says. “Because the inventory is so low … you’re seeing low-rise continuously decline on the back of no product to sell.”
It’s not that people don’t want low-rise houses — they just can’t find them. Provincial policies, brought in over the past eight years to encourage intensification, have created an environment more favourable to high-rise development, Mr. Carras says.
Conventional families will suffer from the change. “The ability to create what you’d call the traditional detached family home was altered — the intent for more of that was altered because of intensification,” Mr. Carras says. “High-rise condo units tend not to be very efficient for two parents and multiple children, but it’s the least costly option, because the gap between low-rise and high-rise right now is a little over $70,000 for new homes.”
But the thriving new condo market has been favourable to some: the investor, for example. With fewer rental buildings constructed throughout Ontario, Mr. Dupuis says, investors aren’t having problems finding renters to fill their new units when construction is finished. According to data from the Canadian Housing and Mortgage Corp., released in June, the vacancy rate in the Toronto rental market is currently 1.6%, down from 2.7% last year. “Even with all the condos that have been sold, built and turned over to investors who have put them on the rental market, vacancy rates are still going down in Toronto,” Mr. Dupuis says.
As for the condo market, Mr. Dupuis expects it to slow down now that summer’s here. It usually does, he adds, with fewer project releases. “I do expect the summer will moderate to some degree. It just is what it is,” he says. “Although there will be some people who decide to jump the shark and release in the summer.”
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.
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