Yearly New Condo Sales Paced to Smash 2007 Sales Record

Urba­na­tion Inc., the lead­ing source of infor­ma­tion and analy­sis on the Toronto con­do­minium mar­ket since 1981, released its Q3-2011 mar­ket overview.

The new condo mar­ket in the Toronto Cen­sus Met­ro­pol­i­tan Area (CMA) con­tin­ues its tor­rid sales pace, with Q3-2011 mark­ing the fourth con­sec­u­tive quar­ter in which sales topped 5,000, with 6,318 new condo sales. That marks an increase of 66 per cent over Q3-2010 (3,805) but a decrease from the record high sales of Q2-2011 (9,445).

There have been a total of 27,244 sales in the past 12 months, while new condo sales through the first nine months of 2011 have already sur­passed the 2010 year-end total (20,964 ver­sus 20,491).

Approx­i­mately 58 per cent of the CMA sales in Q3 were real­ized in 33 new site open­ings (3,694 sales, a 56 per cent absorp­tion rate) as newly launched projects con­tinue to sell well and attract new purchasers.

“With these unprece­dented sales suc­cesses con­tin­u­ing and with the increased investor activ­ity, there are con­cerns that pric­ing will, or is, ris­ing too rapidly on spec­u­la­tive buy­ing deci­sions,” says Ben Myers, Urba­na­tion Exec­u­tive Vice Pres­i­dent and Edi­tor. “How­ever, annual index price growth remains below the five-year aver­age of 8.1 per cent, at 7.4 per cent in the new mar­ket, and equal to the five-year aver­age in the resale mar­ket (7.6 per cent increase).”

Myers notes, how­ever, that some fac­tors could mask the fact that prices are ris­ing too quickly, includ­ing the influx of lower-priced con­do­minium projects in the ’905′ and outer ’416′ areas, which can pull down the over­all aver­age index price in the Toronto CMA. Key areas in the CMA are expe­ri­enc­ing year-over-year index price infla­tion that is above the five-year CMA aver­age, includ­ing Mis­sis­sauga (10.2 per cent), the for­mer City of Toronto (9.0 per cent), and Markham (8.6 per cent).

In response to con­cerns about the amount of invest­ment activ­ity in the Toronto CMA, Myers points out that data indi­cate the investor mar­ket is com­prised of more long-term micro-landlords than short-term speculators.

“The major­ity of buy­ers that do not intend to occupy the suite they pur­chased are adopt­ing long-term invest­ment strate­gies and avoid­ing short-term mar­ket price fluc­tu­a­tions result­ing from poten­tial over sup­ply or other fac­tors,” he says.

Urba­na­tion tracked a total of 346 new con­do­minium projects in Q3-2011 (an increase of 18 per cent annu­ally). Unsold inven­tory increased 7 per cent quar­terly in Q3 to 13,259 units, but is vir­tu­ally unchanged annu­ally from the 13,257 unsold units in Q3-2010.

There were 5,364 con­struc­tion starts and 1,607 com­ple­tions in Q3-2011, while the 42,573 units under con­struc­tion are a record high for the Toronto CMA.

But pro­jected pop­u­la­tion growth, cul­tural changes, longer com­mut­ing times, short­age of land, green­belt leg­is­la­tion and high-density tar­gets within the Places to Grow provin­cial ini­tia­tive are all pre­cip­i­tat­ing a fun­da­men­tal shift away from low-rise hous­ing, Myers says.

“All of these rea­sons will con­tinue to tip-the-scale towards apart­ment living.”

Look­ing ahead, Urba­na­tion pre­dicts that the CMA will smash the annual sales record of 22,654 recorded in 2007, with approx­i­mately 26,000 sales expected by years-end.

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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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