A total of 27,217 new condominium apartments were sold across the Greater Toronto Area in 2016, rising 34% over 2015 to a new high. Remarkably, sales totals topped the previous record set in 2011 on much fewer new pre-construction launches (18,466 in 2016 vs. 28,204 in 2011). Activity ended the year strong with 7,422 sales in Q4-2016, an 18% annual increase. The strength in demand combined with a 6% decline in new launches last year pushed unsold inventory in development down by 47% from the end of 2015 to a more than 10-year low of 9,932 units, which equaled only 4.4 months of supply (a balanced market for new condos is approximately 10 months of supply).
New condo sales grew the most in the suburban 905 Region last year, soaring 82% to a high of 8,703 units in 2016 and representing a record share (32%) of GTA activity. Sales also increased by a robust 57% in the outer-416 areas of Etobicoke, Scarborough and North York (7,397 units) on higher new launch activity last year, while a minimal 3% gain was recorded in the former City of Toronto (11,116 units) as launches dropped by 40%. The demand-supply imbalance was most acute in old Toronto, where unsold inventory plunged by 57% to 3,503 units, or 3.8 months of supply.
The overall average index price for sold units in active development across the GTA continued to grow at a moderate annual pace of 3% in Q4-2016 (to $598 psf), which was impacted by the shift in activity to lower-priced suburban markets last year. Within the former City of Toronto, average selling prices within projects launched in 2016 reached $746 psf, up 14% compared to new launch prices in 2015. At the end of 2016, remaining inventory in new projects in old Toronto was offered at $795 psf.
The draw down in inventory will limit the market’s ability to top 2016’s record activity. Urbanation is forecasting 23,000 new condo apartment sales in 2017, with the expectation that developers will respond to present market conditions by launching a greater number of new projects this year.
A record volume of 25,187 condo apartments were resold in the GTA in 2016, rising 22% annually and representing a high of 26% of all GTA resales last year. Sales of resale units in Q4 were up 26% from a year ago, while total listings in the quarter were down 14% year-over-year. This divergence caused the sales-to-listings ratio to hit a record 80% in the fourth quarter (up from 55% in Q4-15), which led prices to grow at annual rate of 16%. At an average unit size of 861 sf, the average resale price reached $458,000, or $532 psf. For the first time, condo apartments represented the majority (59%) of all resale activity in the GTA below the $500,000 price point.