Record Toronto Condo Growth Raises Questions
Urbanation’s Q2/07 Market Overview Shows Record New Condo Numbers
TORONTO, August 8 (Canada News Wire) - With over 10,000 new condominium sales in the first six months of 2007 in the Greater Toronto Area, sheer volume is the story at the end of the second quarter of 2007 as there were record numbers of new sales at 6,997 units; resales at 4,165 units; new project openings at 36; and new condominium units at 54,924 by the end of the quarter June 30, 2007, according to the latest Urbanation Market Overview.
Toronto is on track to break the 2005 record of 16,224 sales, said Urbanation’s Editor and Executive Vice President Jane Renwick. “We are currently forecasting a total of 17,000 new condominium sales and 14,000 condominium resales in 2007.”
Describing the overall results as “a lot of activity for one quarter to absorb,” the Urbanation report asks if “the Toronto condominium market can sustain this kind of volume, especially in an environment of aggressive price increases?”
Added Ms. Renwick, “Affordability - from both an investor and first-time buyer perspective - is also being tested as prices continue to rise. The performance of Q3-2007 could indicate whether Q2-2007 was an anomaly or the beginning of a new trend.”
Analysis of the second quarter data shows that parallels to the late 1980s (nearly 20 years ago) have emerged: the sales-to-unsold supply ratio has not exceeded 55% since 1988; however, it reached 61.9% at the end of Q2-2007.
Quarterly price increases have not surpassed 5% since 1988/1989, but prices have risen 6.6% from the first quarter to the second quarter of this year.
The year-over-year price increase was also significant at 12%, which represents levels only experienced three other times in the past two decades (1987 to 1989, 1994 and 2000). Urbanation is expecting an additional 29 new projects to open in the third quarter, which will bring another 7,623 new units to the Toronto condominium market.
Despite the recent price increases and parallels to the late eighties, Urbanation is still confident in the new and resale Toronto condominium markets, stating that condominiums fill an important housing gap between the rental and single family detached housing markets.
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