Tag Archives: institutional investors
George Carras – Toronto Star
Last year was a record for the GTA’s new condo market, which generated approximately $12.7 billion of new sales, a value roughly equivalent to the GDP of Iceland.
Earlier this month, RealNet Canada released the official 2011 results for the GTA new home market. Prior to the media conference, an exclusive briefing was held for more than 350 “RealInsiders.” The briefing provided detailed analysis and expert perspectives on the state of the housing market. (A special summary report of this private briefing is available for download at www.realnet.ca/GTA2011)
Ups and downs
What went up in 2011? A lot. New highrise sales set a new record high of 28,466 units. Total new home sales also rose in 2011, which was the second highest year on record. A total of 45,926 homes sold last year, at a value of more than $22 billion.
In the 905, highrise market share is expanding. Almost one of every three new homes sold in the 905 last year was a highrise home. Also up is the lowrise new home index price, which closed the year at $545,372, an 8 per cent increase over 2010.
What went down? Total new home supply did, which in turn drove new home options for consumers to record low levels.
The highrise index price closed the year at $434,322, down 2 per cent from 2010. Highrise unit sizes have also gone down. In fact, the main reason highrise prices are down is because the index unit size shrank a further 52 square feet in 2011.
The GTA’s new home and condo market were not operating out of step last year. Indeed, there was a high degree of synchronicity across most property markets. It appears everybody loved Toronto real estate in 2011.
REITs, pension funds, institutional investors and private investors all invested record levels of capital into commercial real estate property markets in 2011, topping the previous record set in 2007. And resales in 2011 were at the second highest level on record, according to data from the Toronto Real Estate Board.
The City of Toronto represented a growing share of the total new home growth in 2011, with 47 per cent of total new home sales occurring in the 416, almost double what it was in 2000. But the intensification shift was not limited to condos in downtown Toronto.
The move toward intensification gained momentum in the 905 as well. In 2000, highrise homes in the 905 represented approximately 5 per cent of total new home sales. In 2011, highrise sales represented 32 per cent of total new home sales in the 905. That means almost one of every three new homes sold last year in the 905 was a highrise home.
Looking for a new detached home on a 45-foot lot? Better act fast — there are only 2 ½ months of supply left in active builder inventories. Some new supply is expected to come to market in the spring, but it will be limited.
How about a one-bedroom condo with a den instead? There must be an abundance of those, right? Think again. Based on the rate of sales and current active inventories, there are only 4.4 months of supply for a new one-bedroom condo with den across the GTA.
Lowrise and highrise prices moved in different directions in 2011. As of Dec. 31, the price gap was the widest on record, at $111,050. The lowrise new home index price, which includes detached, semi-detached, townhomes and links, closed the year at $545,372, which was $42,182 (or 8 per cent) higher than December 2010.
The highrise new home index price as of Dec. 31 was $434,322. That’s down $7,341 from December 2010, but the index unit size also shrank by 52 square feet.
What’s ahead in 2012 and beyond? Likely more of the same as we shift toward a taller and smaller GTA.
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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