Canada's Condominium Magazine
The latest report from condominium authority Urbanation on the Toronto condo market downplays any concerns about over supply. While 2012 saw a record number of new condominium starts, with developers beginning work on 24,388 units in 104 projects, the ratio of sold to unsold units has remained consistent and “above the long-run average in recent years,” according to Urbanation’s Ben Myers.
The number of new condos sold in 2012 was 17,997. This was above the ten-year average (17,139) but down from the “record-breaking pace” of 2011.
Myers notes that over-building was a term much used in the second half of 2012. However, his company surveyed developers, lenders and brokers last December and found that just 11 per cent of respondents rated over supply as their biggest worry at the beginning of 2013.
In fact, by Urbanation’s numbers, 79 per cent of new condominiums in the Toronto market in 2012 were sold. That was down slightly from the third quarter of 2012 at 80 per cent, but above the ten-year average of 78 per cent.
Several records were set last year, including the overall number of condos started (24,388), the number of active developments (355). and total units under construction (56,866).
In the resale market, it was lack of supply, not over supply, that caused problems for buyers. Just 3.2 per cent of 227,700 tracked by Urbanation were listed for sale in Q4 2012. This was the lowest quarterly level in over ten years; resale activity declined 14 per cent. However, the sales-to-listings ratio increased in that quarter, indicative, says Urbanation, of “relatively balanced market conditions.”
What this represents in part is investors holding on to their units and renting them, rather than selling, says Myers. “We do not subscribe to the theory that a major correction in resale condominium pricing is forthcoming, the lack of recessionary conditions, the nearly non-existent foreclosure market, and the unwillingness of condominium sellers to accept low-ball offers will keep prices from falling to any significant extent in 2013.”
The number of resale condominiums traded in 2012 was 15,292; this is above the ten-year average of 13,486.
Urbanation predicts that 2013 will see 17,000 new and 14,500 resale condo transactions in Toronto.
Urbanation has provided analysis of the Toronto condominium market since 1981.