Canada's Condominium Magazine
Predictably, sales are down in all types of homes. One of the key factors is clearly lack of inventory. Even though Urbanation previously reported a Q1-2018 condo construction at a record high at 61,337 — inventory still remains tight. This didn’t include 37,389 new units in the preconstruction phase — 86% of which presold. In new condos, inventory is at a 16-year low — less than 8,000 units available as of Q1 2018 (according to Urbanization.)
Low inventory pushing condo prices up
Now, according to TREB, the resale market is also being pressured by low inventory. TREB reports, for May 2018, new listings are down by 26.2%. On condo apartment units, this has pressured prices upwards:
- up 5.7% overall for May 2018, year-over-year
- up 6.5% in the 416
- up 1.2% in the 905.
Acording to TREB:
Supply of homes available for sale continued to be an issue. New listings were down by 26.2 percent. The fact that new listings were down by more than sales in comparison to last year means that competition increased between buyers.
Sales dropped year-over-year, comparing to 2017, a hectic market year. Sales of condos in May 2018:
- 1745 in 416, down 13.8% year-over-year
- 648 in 905, down 19.9%
Whether this is due to limited inventory — it’s certain to be one of the reasons — or other market forces is not precisely clear. The popularity of condos, combined with the low inventory is unquestionably keeping prices strong.
Jason Mercer, TREB’s Director of Market Analysis explains: “Market conditions are becoming tighter in the Greater Toronto Area and this will provide support for home prices as we move through the second half of 2018 and into 2019. There are emerging indicators pointing toward increased competition between buyers, which generally leads to stronger price growth. In the City of Toronto, for example, average selling prices were at or above average listing prices for all major home types in May.”
Price increases year-to-date versus monthly
On a year-to-date basis (including all months so far), pricing on condos rose:
- 7% average overall versus 5.7% for May only
- 7.7% average overall in the 416 versus 6.5% for May only
- 3.9% average overall in 905 versus 1.2% in May only.
Home Price Index
TREB’s HPI, or Home Price Index, remains one of the key ways buyers, sellers and realtors gauge the market. For all types of homes, except apartment condos, the HPI has declined. Looking only at condo apartments by region, the HPI is up, in all but Durham Region:
- 8.29% on average
- 10.10% in Halton Region
- 4.15% in Peel Region
- 10.12% in Toronto
- 1.02% in York Region
- Down 1.15% in Durham Region