New Condo Sales Decline to Decade Average in 2018



TORONTO – February 01, 2019:  Urbanation Inc., the leading source of information and analysis on the GTA condominium market since 1981, released its year-end 2018 market results today.


New Condo Sales Moderate from Record Levels

The number of new condominium apartments sold in the Greater Toronto Area totaled 20,028 units in 2018, declining from highs of 34,697 sales in 2017 and 27,098 sales in 2016. The slowdown last year brought sales volume for new condos back in line with the 10-year average of 20,493 units sold between 2008 and 2017. Sales in the fourth quarter reached 6,040 units, down 31% year-over-year from a record 8,816 units in Q4-2017.

New supply entering the pre-sale market outpaced demand in 2018 for the first time in five years. The total number of new units launched for pre-sale last year reached 24,347 units, slowing from a record of 32,843 units launched during 2017 but remaining at one of the highest levels ever. A 66% share of new pre-sale condos launched during 2018 were sold by year-end, down from highs of 82% and 76% for new pre-sale launches in 2017 and 2016, respectively. The 10-year average for sales absorption within newly launched projects was 58%.


Investors Begin to Act More Cautiously as Prices Reach New Highs

The slowdown in activity last year can partly be attributed to less demand from investors, who typically represent the largest component of new condominium purchasers in the GTA. This occurred as prices within new pre-sale launches have soared, growing by 16% in 2018 to a record $921 per square foot ($1,117 psf within the former City of Toronto) to bring the two-year increase to 56%. This level of appreciation far outpaced resale condominium price growth of 35% and condominium rent growth of 19% during the same period, thereby reducing the attractiveness of new condos to some investors. It was found that the premium for new pre-sale condos compared to resale units completed in the previous five year period grew to a record $112 psf in 2018, more than doubling the $46 psf premium in 2017. However, in a sign that new condo prices may be levelling out, the average asking price for unsold units in development grew by just 0.4% between Q3 and Q4 to $978 psf, representing the smallest quarterly increase in nearly three years.


Higher Supply in 2019 to Limit Price Growth

The number of unsold new condominiums in development increased by 47% year-over-year to a more than two-year high of 13,047 units in Q4-2018. However, this level of inventory remained below the decade average of over 16,000 units and represented 7.8 months of supply, lower than the 10-year average of 10.9 months. As such, some further increases in new condominium prices can be expected in the near-term, leading into more balanced conditions in the second half of the year as the upward trend in supply continues.

A higher level of condominium completions in 2019 should also work to moderate price growth this year as a record 21,991 units are currently expected to finish construction. This would represent a 29% increase from the 16,994 completions recorded in 2018. While 98% of units scheduled to complete this year are pre-sold, more than half were bought by investors who will either add their units to the rental market (which is most common) or offer them for sale at some point during the year. The additional supply from new completions is expected to contribute to a moderating trend for condo price and rent growth in 2019.


Resale Condo Market Becoming More Balanced

Resale condominium transactions declined for the second consecutive year in 2018 to 20,121 units. The 16% annual decrease in sales came as supply remained tight throughout most of the year as existing condo owners held off moving up in the market, and demand from first-time buyers was impacted as prices remained high, interest rates increased, and new mortgage stress test rules were implemented. Overall for the year, resale prices increased by an average of 7.3% on a per square foot basis (down from the 26.1% increase in 2017), with growth moderating slightly to a 6.5% annual pace in Q4-2018 as supply improved. In Q4-2018, the average resale unit sold for $584,000, or $690 psf based on an average size of 846 sf. Condo fees averaged $0.69 psf.


“The GTA condo market has started to normalize after unprecedented activity in recent years. Overall, market fundamentals continue to support current sales levels and prices, although greater caution should be exercised with respect to investing in new units, particularly over a short-term time horizon, as current trends are pointing towards slower appreciation going forward,”

Shaun Hildebrand, President of Urbanation.




Urbanation has been surveying the GTA condominium market each quarter since 1981 through established relationships with the region's developers, brokerages, and lenders. In addition, our team of highly skilled researchers conduct regular site visitations to compile the industry's most in-depth coverage on every new project in development across the region.

Urbanation's Condominium Market Survey subscription provides access to our historical online database of new condominium developments in the GTA and Hamilton-Grimsby, including full project profiles and unit information, and market reporting metrics such as sales totals, absorption rates, inventory levels, average sold and unsold prices per sf, incentives, and more. Data is reported at the individual project level, with tools to generate regional, municipal, and submarket totals. Information on upcoming new condo project launches and future developments are tracked in our proposed database, which is also included as part of the Condo Market Survey subscription.

The subscription is further enhanced through the market's most accurate database of resale condominium project data. Our detailed unit specification database allows users to generate precise resale prices per sf, in addition to standard reporting metrics, in an easily searchable database format that can filter projects by submarket, year of building registration, size of building, and much more.



Urbanation is a real estate consulting firm that has been providing market research, in-depth market analysis and consulting services to the apartment industry since 1981. Urbanation uses a multi-disciplinary approach that combines empirical research techniques with first-hand observations and site visits.  Urbanation offers subscription services and custom market studies covering the new construction condominium and purpose-built rental apartment markets in the Greater Toronto Area.                                                                  Contact: Shaun Hildebrand                                          

                                                                                                416 922 2200 ext. 243

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