Condominiums sales in the Greater Toronto Area hit near-record levels in the fourth quarter of 2010. There were 37,041 new and resale condominium units sold in 2010, enough to make it the second best year on record, and just 3 per cent shy of the all-time A strong rebound in the new Condominium Market was partly responsible, New unit sales were much higher than expected, spurred by tremendous results at a number of new project openings in the city of Toronto. Last year’s total condo sales represent a 20 per cent gain over 2009 figures.
A Toronto record of 18,221 high rise Condominiums were started last year, more than twice as many as in 2009. Those kinds of figures give pause to some buyers who fear a repeat of the 1989 crash in Toronto, which saw Condominiums prices Drop in half at some projects.
There are 286 active projects in the GTA, representing 73,953 units — the most of any city in North America. The sheer number of units has had some analysts warning for years that a correction is imminent in the high rise market.
But with interest rates remaining so low, lower than most analysts had forecast. Price per Sq Foot has also remained flat over the past two quarters. In the GTA, the average asking price for newly built Condominium rose by 8 per cent to $530 per square foot in the fourth quarter of 2010, from $493 per square foot in the fourth quarter of 2009. In the former city of Toronto, new construction averaged $643 per square foot. In the downtown core, it was a lofty $723 per square foot.
Resale condominium pricing was much more affordable, with existing units selling for $374 per square foot on average in the GTA. In the city of Toronto it was $487, and in the downtown core it hit $518. Prices have held on in the new condominium market, but have flattened in the resale market.
The new construction market is typically supported by investors, while resale condominium have a higher end-user component. At some point the investor is going to have to sell to an end user, so the price trend will follow the resale market.
High rises accounted for more than half the new home sales in the GTA for the first time, but in the past years, they made up about a quarter of all new home sales. But that has changed as single-detached homes become out of reach for many buyers.
Foreign investors looking to the relative safe haven of Canada have also piled into the Real Estate Market and in particular to the condominium market. Many of the investors are from Asia and the Middle East.
Data Source: RealNet Canada Inc /Urbanation Inc
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