Prices in the new condo market relatively flat
Contact: David Eisenstadt/Beth Merrick
The Communications Group Inc.
416.696.9900 ext. 36 or ext. 40
Q3/09 SURGE IN TORONTO CMAâ€™S NEW CONDOMINIUM MARKET STUNS INDUSTRY, SAYS URBANATION
â€˜Miracleâ€™ rebound in new-condo sales attributable to affordable new site openings, while the resale-condo market sets record highs in sales and pricing
TORONTO, November 3, 2009â€¦Urbanation, Inc., the leading source of information and analysis on the Toronto condominium market since 1981, today released highlights of its Q3/09 market overview.
According to Ben Myers, Editor and Executive Vice President of Urbanation, â€œThe performance of the Toronto Census Market Area (CMA) condominium apartment market in Q3/09 was nothing short of miraculous. There were more new condominium sales in the third quarter of 2009 than in the first two quarters combined and for the second consecutive quarter, a record number of resale condominiums were purchased across the CMA.â€
New condominium unit sales for Q3/09 numbered an astounding 4,617, a 56 per cent increase compared to Q2/09 and 16 per cent increase over the same quarter in 2008. Resale units sold in Q3/09 numbered 4,854, a 29 per cent increased over Q3/08.
Myers said, â€œThe sharp turnaround in the new condo market was unexpected, but a pleasant surprise following nine months of depressed activity.â€
The average price per square foot (PSF) for the unsold new units in Q3/09 of $475 PSF has remained relatively flat for over a year. Most of the new projects openings in the Quarter launched with pricing below $475 PSF; these affordable projects contributed to the surge in new condo sales in Q3/09.
â€œCanny developers reacted by cutting back on previous Quartersâ€™ incentive programs (which had featured incentives such as free parking and locker, cash back at closing, or free suite upgrades),â€ Myers added.
Q3/09â€™s sales activity brought the level of unsold new unit inventory down to a level 30 per cent below the high of 17,610 in Q4/08; to 12,227 by the end of Q3/09.
â€œMany of the CMAâ€™s major developers responded to the sharp uptick in sales in Q3/09 with a flurry of high-density land sale transactions in Q3/09, most notably the acquisition of the cancelled 1 Bloor development by Great Gulf Homes,â€ Myers said.
In addition to record level of resales in Q3/09, average price per square foot (PSF) in the resale market of $337 psf, surpassed the previous quarterly record high of $328 PSF in Q3/08. Total listings were down compared to Q2/09 - this lack of supply resulted in the average resale suite in the Toronto CMA taking just 27 days to sell, down from 36 in Q2/09.
â€œContributing to the lack of supply in Q3/09 was the recent City of Toronto workersâ€™ strike, which delayed registration of several new projects,â€ he added.
â€œLooking to Q4/09 and beyond, the upturn in Toronto CMA condominium market will continue if the key elements remain in place; affordable PSF, low interest rates, continued migration into the CMA, and an absence of any combination of government taxation, banking or regulatory actions that might impede high-density growth,â€ Myers said.
The unprecedented decade-long boom in the Toronto CMA condominium market continues thanks to the ingenuity of the industry stakeholders, and the confidence buyers have in developers ability to delivery high quality product in the midst of a global recession.
Urbanation is Canada's leading condominium market research company. Since 1981, Urbanation has analyzed the Toronto condominium market, publishing the â€œindustry bibleâ€ â€“ Urbanationâ€™s Condominium Market Survey. This quarterly Report tracks new, resale and future condominium projects. Urbanation also provides the development community with essential consulting services, which include site and topic specific market studies and surveys.