Record year for new Toronto condo sales? No kidding!

By Ben Myers
October 24, 2016

In 2011, there were about 26,000 new condominiums sold in the GTA. This crushed all previous records for transaction activity. There were a lot of investor buyers in 2011, and people worried about foreign money coming into the market. Regulators fretted about assignment activity (flipping units prior to completion), and the condo naysayers guaranteed that when all these units were completed, rents would decline, sending the highrise market into a tailspin.

Toronto condo with CN Tower

By late 2012 and into 2013, the condo market in the GTA began to lose some luster as new condo sales declined, unsold inventory increased and resale price growth flattened out. I personally declared that the Toronto condo boom was over. Many in the anti-development crowd were pretty confident that their dire predictions were coming true.

They were wrong and so was I. Investors were not flipping their units, foreign buyers were not fleeing the market, and demand for Toronto condo rentals continued to outpace supply – despite the unbelievable number of completed condo buildings. In 2016, the Toronto condo boom is back, and its bigger than ever.

Altus Data Solutions reported that there has been over 20,000 new condo sales in the GTA in 2016 (January to September), an increase of 37 per cent annually. The number of new units in 2016 project launches has dipped 21 per cent, while unsold supply has declined 36 per cent. Highrise prices are up 10 per cent in September over the year prior. With a strong fourth quarter, the new condo market could set another sales record – you’ve got to be kidding me! I certainly didn’t see that coming. I expected a much more modest level of transactions in the GTA moving forward.

The same factors that drove the 2011 condo market are fueling the market in 2016: low interest rates, unaffordable single-family housing, investors keen on renting their units out, and a seemingly insatiable demand to live in amenity-rich locations with access to transit.

With new records in the book for 2016, what’s in store for 2017? New mortgage rules will make it even more difficult for current condominium owners to move up to a townhouse or single-detached home, while also making it difficult for some first-time buyers to get in. These two factors should keep demand for ownership and rental condos high and sales activity strong.

Are you ready to buy a new condominium yet? Will you let another five years go by, worrying about the same three or four market uncertainties? Before another record year of condominium price appreciation passes you by, speak to a realtor and a mortgage broker, do your own extensive research, and most importantly, buy what you can afford.

 

About Ben Myers

Ben Myers is President of Bullpen Research & Consulting, a boutique real estate advisory firm, that works with landowners, developers, and lenders to better inform them of the current and future macroeconomic and site-specific housing market conditions that can impact their active or proposed development projects. Follow Bullpen on Twitter at @BullpenConsult or find Ben at bullpenconsulting.ca

Have great ideas? Become a Contributor.

Contact Us

Our Publications

Read all your favourites online without a subscription

Read Now

Sign Up to Our Newsletter

Sign up to receive the smartest advice and latest inspiration from the editors of NextHome

Subscribe