In the first quarter of 2017, 9,932 new condominium apartments were sold across the Greater Toronto Area, an increase of 73 per cent year-over-year, a new high for the quarter, according to Urbanation Inc.’s Q1-2017 market results.
Activity climbed significantly during the first few months of the year due to record levels of demand and a doubling of new launches compared to 2016. A total of 6,293 new units were launched for presale in Q1, compared to 3,061 one year ago. With demand continuing to far surpass new supply, the inventory of unsold condos in development fell by 61 per cent year-over-year to 6,481 units, the lowest it has been in 15 years. With only 2.5 months of inventory on the market, new launches would need to significantly outweigh sales in the future to bring the market into a balanced state of 10 months.
The average price of newly launched condominium apartments in Q1-2017 was $733 per square foot in the City of Toronto and $608 per square foot in the 905 region, causing the GTA average of $694 per square foot to climb five per cent over new launch prices compared to Q4-2016 ($659 per square foot). At the end of the quarter, remaining inventory had increased in price by 20 per cent annually to $719 per square foot.
A record 94 per cent of units in development were presold in Q1-2017, rising from 86 per cent in Q1-2016 and 84 per cent in Q1-2015. A total of 80 projects were completely sold out during the quarter, more than three times the number of projects that were entirely sold out during the same period one year ago (25). Among projects with inventory remaining, the average number of unsold units was 25, with a median of 10 available units per project. Both figures are less than half of what they were over the past two years.
New condo apartment sales far surpassed resales in Q1, which increased 24 per cent year-over-year to 6,203 units. Resale condo activity was restrained by a seven per cent decline year-over-year in total listings to 8,360 units. The sales-to-listings ratio reached a quarterly high of 74 per cent, up from 56 per cent in 2016, while the average days on market fell to an all-time low of 15 days, which is less than half the average (31) in Q1-2016. The average selling price increased 24 per cent annually to $510,000, while the average value per square foot rose 28 per cent to $598.
Following the recent strength in condo price appreciation, Urbanation noticed an increase in resale activity within newly completed buildings as well as more units transacting twice within shorter periods of time. Within new projects completed and registered over the past two years, there were 1,059 sales in Q1, representing 17 per cent of total resales during the period and increasing by 69 per cent over the 625 units resold in Q1-2016 within projects registered in the preceding two year period. In addition, 249 resale units in Q1-2017 were sold for the second time within the past 12 months, up 53 per cent year-over-year. The share of total Q1-2017 resales that were bought and resold within the past three months was 0.8 per cent (compared to 0.6 per cent in Q1-2016), within six months was 2.1 per cent (1.6 per cent), within 12 months was four per cent (3.3 per cent), and within 24 months was 9.4 per cent (7.2 per cent).
“The shortening of holding periods for some condo buyers is an outcome of the rapidly accelerating market,” said Shaun Hildebrand, Urbanation’s senior vice president, in a press release. “Although the share of short-term condo market participants still appears relatively low, it will be important to monitor the situation closely going forward as market conditions evolve.”