Canada's Condominium Magazine
A couple of things are clear about Toronto’s condo market. It is going strong, and it is very much a downtown phenomenon. Nearly twice as many new condos were sold in Toronto in the first quarter of this year as in the same period last year, the bulk of them south of Bloor Street. The condo market, according to Shaun Hildebrand of Urbanation, has proven “resilient” so far this year, and “very centralized.”
Concerns expressed by some about unsold inventory piling up seem unfounded. The number of unsold units fell to its lowest level since 2012, while pricing for both sold and unsold units moved up. Sales exceeded new project launches by the widest margin in three years, and this was the busiest quarter for new launches in two years. All told, “Things continue to move in the right direction,” said Hildebrand, whose report on the Toronto condo market in Q1-2014 was just released.
That quarter saw a “big rebound” in the new condominium market, notable for a shift in activity to central areas of the city. Looking at unsold inventory, the report finds that the highest percentages are found outside the downtown core. Some areas, including Etobicoke, North York, Markham and Mississauga, have unsold inventory of pre-construction units as high as 58 per cent. By contrast, in the downtown core, as much as 88 per cent of pre-construction inventory is sold. Fully 70 per cent of first-quarter sales this year were in the downtown core.
Things continue to move in the right direction. Buyers are gaining confidence and developers remain focused on unwinding inventories and offering competitively positioned new product to the market. Certainly the performance of the resale market has helped to create an overall sense of stability.
Shaun Hildebrand, president, Urbanation
The most popular projects in the city in terms of sales of existing inventory were large downtown projects with average suite sizes between 558 and 627 square feet. Those suites, either studios or one-bedrooms, sold for between $624 and $826 per square foot.
As for new openings, developers are catering more and more to investors, promoting central locations, competitive prices and small unit sizes. An impressive 75 per cent of all sales from new openings were in large new projects located south of Bloor Street.
Looking at the resale condo market, Urbanation reports that first-quarter sales were up 9 per cent from last year. Fewer new listings meant a tighter market for buyers, and resale prices grew by 5.1 per cent. The resale market has “held steady” despite the addition of more than 16,000 newly registered units over the past twelve months. In fact, Torontonians’ appetite for condos seems insatiable. “It has been remarkable to see how the quickly expanding universe of completed units has failed to have any major impact on supply levels in the market, helping to support resale values,” said Hildebrand.
How big is that universe? The Urbanation report tracked 381 active high-rise condo projects in Toronto, containing 98,536 units. Sales of new condos in Toronto reached 5,140 in Q1, and fourteen new projects launched during that time. There were 18,293 unsold units, a drop of 3 per cent from Q1 2013.