Toronto marked a record period for condo sales in the second quarter of 2019. This is according to an Urbanation inc. report which states new condominium sales in the Greater Toronto Area (GTA) totaled 8,902 units in Q2-2019, surging 77% year-over-year as 10,848 units were launched for pre-sale during the quarter.
“Sales reached their second-highest Q2 level on record behind the market peak in Q2-2017 (11,413 sales), which followed a muted first quarter of activity and brought total first-half sales of 11,967 units in 2019 above with the 10-year average of 11,205 units,” the report announced. “Units launched during Q2 in the GTA averaged a sold index price of $903 psf [per square foot], while average prices for remaining inventory reached $1,000 psf for the first time, rising 9% year-over-year.”
Urbanation credits the GTA’s robust condo activity to strong fundamentals, including record-low borrowing costs, record-high population inflows, a healthy job market and tight conditions in the resale market, and a significant shift to relatively low-cost projects. Moreover, nearly every condo project launched for pre-sale in Q2-2019 had received planning approval, reducing the risk of cancellations.
The report indicates that projects priced between $800 and $900 psf in the 416 and 905 municipalities sold 69% of their units, representing the strongest segment of the market. Meanwhile, absorption rates fell to 58% for projects launched between $900-$1,000 psf, declining further to the 50% level for projects that opened for more than $1,000 psf, which included four of seven projects selling less than 50%.
Urbanation added, “Projects priced below $1,000 psf have attracted a wave of demand as buyers seek out ‘value sites.’ Pricing for remaining units in the former City of Toronto averaged of $1,291 psf, which compared to $894 psf in the outer 416 municipalities and $740 psf in the 905.”