Canada's Condominium Magazine
With 30 new GTA-area condominium projects expected to launch in the next few months — and with resale condominiums continuing to increase in price — no one is surprised by Urbanation’s report that “Condo Construction Surpasses 60,000 Units for the First Time” — for Q1 of 2018. There is no doubt these condominiums are needed in the “new normal” of 4-month inventory; a “normal” market tends to average a 12-month inventory.
Although new condo sales are back to its 10-year average (after the surge of 2017), construction is focused on fulfilling the growing demand for condominiums.
Urbanation, the leading source of information on the Toronto condominium market, reviewed Q1 2018 data and found:
- Condo apartment construction reached a record 61,337 units as of the end of Q1-2018
- An additional 37,389 new condo apartments were in the pre-construction marketing phase, of which a record 86% were pre-sold
- New condo apartment sales totaled 4,219 units in Q1-2018, returning to more typical first quarter volume following a record 9,744 sales a year ago in Q1-2017
- Sales activity was weighed down by fewer new launches, which dropped by 38% year-over-year to 4,029 units
- New launches continued to sell quickly, with 64% of new offerings sold in the quarter, down from 80% in Q1-17 but above the 10-year average opening quarter absorption rate of 53%
- The average sale price for new launches in Q1-18 was $843 psf, moderating from $893 psf for new launches sold in Q4-17 as fewer downtown core projects opened this year, but up 23% compared to Q1-17 launch prices ($686 psf)
- With unsold inventory at a 16-year low of less than 8,000 units, asking prices for remaining units grew 29% year-over-year to $914 psf
- The new condo market became aligned with resale condo activity during Q1, which declined 31% year-over-year to 4,297 units following new mortgage stress test requirements for uninsured borrowers introduced at the beginning of the year
- Resale condo prices have remained resilient, growing 2% quarter-over-quarter and 11% annually to an average of $661 psf
With the tougher qualification rules and average condo prices reaching $558,000 in Q1 ($600,000 in the City of Toronto), demand for studio units strengthened, with average prices rising 24% year-over-year to $381,000.