During the first three months of 2016, there were 5,615 new condominium units sold across the Greater Toronto Area (GTA), a 32 per cent increase year-over-year, according to Urbanation Inc.’s recent first quarter market results. This result is just shy of the Q1 record of 5,680 which was reached in 2012.
High demand and fewer new openings caused unsold inventory in new developments to fall by 16 per cent year-over-year to 15,587 units, including a 22 per cent decline recorded in the former City of Toronto.
Although price growth for resale condo units grew in Q1 to eight per cent to reach an average of $467 per square foot, the index selling price for new condo units grew at a slower rate of three per cent, or $582 per square foot. A lack of new launches in the Toronto core and a shift in activity to suburban areas has caused new condo prices to be held back. However, projects currently under construction have increased asking prices for unsold units by eight per cent year-over-year to $618 per square foot, including a 14 per cent increase in the former City of Toronto.
“The inventory shortage experienced for low-rise housing has spread into the high-rise segment,” said Shaun Hildebrand, Urbanation’s senior vice president, in a press release. “More and more buyers priced out of the single-family home market are looking for alternatives in the condo market, providing a clear opportunity for new development.”
Sales of new condo apartments in the 905 Region more than doubled year-over-year to a record 2,112 units in Q1-2016. Sales in this region were driven higher by the launch of 11 projects that garnered 2,343 units, 61 per cent of which were sold by the end of the quarter. Meanwhile, there were only four new projects totaling 718 units launched in the City of Toronto in Q1, limiting sales growth in the region to seven per cent.
The percentage of total pre-sold units in development reached a new high of 86 per cent in Q1-2016, with pre-construction projects an average of 70 per cent sold, under construction projects growing to 89 per cent sold and recently completed buildings at 96 per cent sold. Standing unsold inventory fell by 15 per cent to 1,482 units. The 8.5 months of supply in new developments is the lowest in four years and a decline from a year ago, when there was 11.5 months of supply.
The inventory of condo units under construction remained stable over the past year, as the end of Q1 saw 50,131 units in 196 projects.
Resale condo apartment activity grew 21 per cent year-over-year to 4,922 units in the first quarter as total listings fell by five per cent, elevating the sales-to-listings ratio to 55 per cent, signifying a sellers’ market. The average selling price for a resale unit was $411,000, at the average size of 880 square feet.