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Toronto condo love: 80% have sold

Could Toronto see a slowdown in new condo releases over the rest of 2012?

That’s what Ben Myers expects might happen, as developers wait for unsold inventory to sell. “I think developers are going to hold off their launches and be a little more selective on when they bring their projects to market,” says the executive vice-president and editor at condominium market research firm Urbanation.

Urbanation currently has 343 active projects listed that have units still remaining, with a total of 87,386 sold and unsold suites. Of those, 18,123 units are unsold — a record number of suites still sitting on the market. But while he and many developers are cautious, Mr. Myers says it’s hard to say what that number really means, given the current market context. After all, he adds, it still only represents 20% of total inventory.

“Eighty per cent of the market is sold, and that’s still below the long-term average,” he says. “Maybe the new normal is this elevated amount of new product out there, so maybe we’ll see that unsold inventory number hover at around 18,000 or 20,000 going forward. Until we look at it a little more long term, it’s hard to say whether it’s really troublesome or not.”

The unsold inventory statistic was released in August as part of Urbanation’s Quarter 2 market overview, which also listed 4,769 new condominium sales across the Toronto Census Metropolitan Area (CMA) from April to June — down 21% from the first quarter.

At the Building Industry and Land Development Association (BILD), meanwhile, new home and condo sales numbers were just announced for July, and show a continuation of some of the trends that have been apparent so far this year. High-rise sales continue to outpace low rise, with a total of 851 low-rise homes and 1,415 high-rise units sold across the Greater Toronto Area (GTA) through the month. Both numbers were down from last July, but up slightly from July 2010. “The low-rise housing supply represented 37% of the new homes sold,” says BILD president and CEO Bryan Tuckey, citing numbers supplied by market research firm RealNet Canada. “A decade ago it was close to 75% of new homes sold were low rise.”

Aaron Lynett/National Post

That lack of low-rise inventory — due at least in part to constricted land supplies because of provincial policy encouraging intensification — has had its effect on price points, too. The average cost of a low-rise home in the GTA in July rose to $613,090, with a $175,000 gap between low-rise and high-rise prices (the high-rise average price was $437,911). “I think that’s a very important indicator to watch … to see if this constricted land supply continues to affect ground-related housing,” Mr. Tuckey says.

For now, he expects that low-rise supplies will continue to remain at record lows. “It is a trend that provincial policy wanted to see in the regions around Toronto — a general trend towards intensification,” he says.


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