Canada's Condominium Magazine
Toronto-area builiding starts for condos soared to record numbers: 78% month-over-month in Ontario, from February to March 2018) as condos remain the most popular option for new home buyers.
“Indeed, note that Toronto starts jumped to the highest since at least 1990, but all of the gain was in condos,” wrote Bank of Montreal chief economist Doug Porter in a note to investors.
Building starts were up in condos and other formst of non-detached homes in Ontario, up at 58,928 first quarter 2018 versus 42,992 in the same period 2017 — this according to CMHC data. As expected, detached homes in Ontario are down, 2018 over 2017, as buyers move to less-expensive forms of housing.
Canada-wide, the trend is similar:
• 150,338 (non detached) housing first quarter 2018 up from 137,979 same period 2017
• 61,568 detached houses first quarter 2018, down from same period 2017.
The numbers support expert opinions that condos and other non-detached home types are the new affordable housing option as buyers adjust to new mortgage rules and government rules designed to cool the market. Regardless of rules, people still need housing, and the new standard appears to be condominiums — particularly high and mid rise.
Last year sales a factor?
Much of the demand could be attributed to last year, although the same can be said of any given year. The decrease in detached home starts seems to refute the proposition that condo starts are just “last year’s sales.” Developers are clearly seeing the market potential for condominiums and developing accordingly.
Overall, March is up 7% on building starts (all types, driven up mostly by condos) versus February — up 26% in Ontario alone. Month-over-month increases support the propisition of “red hot” condo market rather than the idea that it’s “last year’s sales.”
Not just urban condos
Popularity of condos in the 905 continues to grow, driven by somewhat more affordable costs. Although home sales might have dropped year-over-year, condominium demand shows signs of increasing as Millenials and other buyers adjust their target to condominiums.