TORONTO CONDO MARKET STABILIZING
RESALE ACTIVITY REBOUNDS WHILE NEW MARKET SHOWS GRADUAL IMPROVEMENT
TORONTO – November 6, 2013: Urbanation Inc., the leading source of information and analysis on the Toronto condominium market since 1981, released its Q3-2013 market results today.
A total of 3,049 new condominium apartments were sold in Q3-2013, down 8% from last year — the smallest annual decline recorded in more than a year. Given the current sales trend and the expected number of launches for the fourth quarter, new condominium apartment sales will likely total approximately 13,000 units in 2013. This compares to 17,997 sales recorded in 2012 and 28,190 sales in 2011. Averaging out the past three years brings sales levels back in line with the historical trend.
“The softer numbers this year should be viewed in the context of the exceptional strength that preceded them. While the recovery towards more normal volumes has been gradual, the industry continues to make the necessary adjustments required to maintain stability in the market, such as reducing inventory build-up, taking a careful approach to new openings and offering more competitive prices” said Shaun Hildebrand, Urbanation’s Senior Vice President.
Outside of the recessionary period in 2009, Q3 saw the lowest number of project openings for a third quarter in 10 years (11 projects totaling 2,557), which helped to bring down unsold inventory for the first time in a year to 18,814 units. The downtown Toronto submarkets in particular remained highly sold, with 85% of units in active development pre-purchased. Activity in the downtown area has been rebounding, with sales up 22% annually during the third quarter.
The average sold index price grew by 2% annually to $540 psf, consistent with the pace of growth recorded during the first half of the year. The average unsold index price declined by 1.5% from last year to an average of $565 psf.
“The strength in demand seen in downtown developments and the broader resale market can be taken as a leading indicator for the rest of the new condo market, which will be helped by increased incentives and price discounts at existing sites,” added Hildebrand.
Resale condominium apartment sales totaled 4,207 units in Q3-2013, up 23% from Q3-2012 — the first quarter that followed the introduction of tighter guidelines for mortgage insurance. Average resale index prices increased by 1.5% annually to $413 psf, or $366,000 for the average sized 887 sf unit traded during the quarter. The sales-to-listings ratio increased to 42% from 38% a year ago, despite 16,000 units registered over the past year.