[Mike in TO]

Condo craze continues with 41 per cent increase

New condo sold every four minutes in June

TORONTO, July 19 /CNW/ - There were more new high-rise condominium suites sold in the Greater Toronto Area in June than ever before as condo sales smashed the all-time record for market share, Desi Auciello, president of the Greater Toronto Home Builders' Association, said today.

"With an all-time high 2,397 new high-rise condos sold in June, home buyers were snapping up a new condo every four minutes the sales offices were open," said Auciello.

High-rise unit sales were up a whopping 41 per cent while total new home sales were up just two per cent as a result of an offsetting 28 per cent decline in low-rise (single-detached, semi-detached and townhome) sales.

According to RealNet Canada Inc., the association's independent source of new home market information, an astounding six out of every ten (60 per cent) new homes sold in June were high-rise suites.

"Frankly, we never thought we'd see the day when low-rise product would represent the minority of our sales, particularly to this extent," Auciello stated. The previous high-rise market share peak was 46 per cent while the annual average (2005) is 42 per cent.

Auciello attributed the continuing condo craze to affordability and choice. "As house prices rise, home buyers seeking a toehold in the market are obviously turning in increasing numbers to the condo market," said Auciello, noting that the RealNet new home price index for high-rise condos ($314,370)
is $80,000 less than for low-rise homes ($393,398 ) .

-------------------------------------------------------------------------
Low Rise High Rise Total
June June % June June % June June %
Region 2005 2006 Change 2005 2006 Change 2005 2006 Change
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Durham 542 240 -56% 31 81 161% 573 321 -44%
Halton 222 344 55% 45 7 -84% 267 351 31%
Peel 698 468 -33% 110 474 331% 808 942 17%
Toronto 144 85 -41% 1,145 1,652 44% 1,289 1,737 35%
York 636 486 -24% 375 183 -51% 1,011 669 -34%
GTA 2,242 1,623 -28% 1,706 2,397 41% 3,948 4,020 2%
-------------------------------------------------------------------------
Source: RealNet Canada Inc
-------------------------------------------------------------------------

The index is essentially the average asking price of all the remaining new homes and condos currently available for sale, as calculated by RealNet Canada Inc.

The new home price index is based on currently available new home offerings, weighted by remaining inventory, for projects of 15 or more units, excluding ultra-luxury product across the GTA.

With the first six months of the year in the books, total new home sales of 21,866 units are down five per cent compared with the first half of 2005. High-rise sales are running two per cent ahead of last year while low-rise sales have declined by 10 per cent.

The top five municipalities in the GTA for June were Toronto, 1737; Mississauga, 585; Brampton, 355; Markham, 262 and Vaughan, 213.

With more than 1,400 members, the GTHBA is the voice of the residential construction industry in the Greater Toronto Area. Established in 1921, the association is comprised of land developers, home builders, professional renovation contractors, sub-contractors, suppliers, service, professional and financial firms. We are proudly affiliated with the Ontario and Canadian Home Builders' Associations.

-30-

 

[TdotTrickyRicky]

An interesting phenomenon I may be experiencing on the ground is the condo-ization of buyer mentality. People seeking all kinds of housing product are less and less do-it yourselfers and more and more people interested in a packaged product. It seems rare to find someone with good spacial imagination or the ability to plan long-term. Perhaps I haven't been around long enough to know that such abilities are exceptional.

 

[building babel]

My neighbours sold their house recently and, my goodness, the hoops they had to jump through in order to make their perfectly fine - if cluttered - home acceptable to their agent, let alone the potential buyers!

 

[Observer Walt]

^ Sounds like the agent did a good job and didn't take the easy way out. Call that agent when you are ready to sell your own place babel!

The condo craze (don't like that word) shows no signs of abating. Affordability is the name of the game and it is becoming more and more difficult for first-time buyers to buy "ground-oriented" homes (detached, semi-detached, most townhouses) in the central parts of the city. This won't change any time soon. We are witnessing the high-rising of Toronto.

 

[paulbali]

It seems to me that there are still lots of homes for less than 300, 000 in Toronto, though perhaps not right downtown.

 

[scarberiankhatru]

^ I just found 239 houses listed on MLS for under $250,000...there's thousands going for ~$300,000, just not in the best neighbourhoods, or they're in OK areas but are small/run-down. This is a guesstimate, but it won't be long before a house for less than maybe $400,000 within 10km of downtown just doesn't exist. And maybe nothing for less than $600,000 within 5km of the entire length of Yonge Street.

 

[building babel]

Observer Walt: I'm fortunate to live on what several real eastate agents tell me is the most "desirable" street in Riverdale, and my neighbours sold their place in three days. Even so, I'm occasionally tempted by the idea of a high rise condo in our glamorous, Manhattanized downtown core. But when I look around my neighbourhood I always have second thoughts about leaving it.

The cultural heart of the city is, after all, only a short streetcar ride away. And there's something appealing in being slightly removed from the action - like the dynamic negative space in a drawing, or the silence between notes in music. The negative spaces that define the positives and allow you to compare their net emotional worths of both.

 

[Jarrek]

But when I look around my neighbourhood I always have second thoughts about leaving it.

And you should.

Personally, I'd never leave my house for a condo.

 

[paulbali]

"there's thousands going for ~$300,000, just not in the best neighbourhoods, or they're in OK areas but are small/run-down"

I bought a raised bungalow in the upper beaches last August for 240K. It's a beautiful house with cathedral ceilings, a spiral staircase to a bedroom loft, hardwood floors and original wood trim, and a finished basement. Yes it's a bungalow but there is probably 3x the usable space that you'd find in most condos in that price range.

It is on a fairly busy street, but so are most centrally located condos. I guess my point is that even with the "catches" that many homes for under 300K come with these days, they are still far better value than most condos.

 

[Speculation is rampant!]

Speculation is rampant!

The condo demand ain't REAL folks! It's mostly speculative investors carelessly trying to cash in on a global wave of cheap credit after the fact. Look for a major slowdown in this segment by the end of 2006. It cannot be sustained by the present demand for hi-rise living in this city. I agree- plenty of $300,000 housing options outside the core, and better value for your dollar.

 

[boiler2000]

Re: Speculation is rampant!

I don't get the "better value for your dollar" claim. The value is dictated by what you want. If you want to live in a condo downtown, then that obviously has more value to you than a small house outside the core.

Space isn't the only criterion that people look at, as is made obvious by the market prices. Location and "lifestyle" are very important, too.

 

[andreapalladio]

Re: Speculation is rampant!

plenty of $300,000 housing options outside the core, and better value for your dollar.

Yes plenty of options, and one of those options is to immediately sink $100,000+ into one of those $300,000.00 bargains in order to make it liveable.

 

[doady]

Re: Speculation is rampant!

Yes plenty of options, and one of those options is to immediately sink $100,000+ into one of those $300,000.00 bargains in order to make it liveable.

Wouldn't an older house anywhere require more fixing up? I am confused by this statement.

 

[andreapalladio]

Re: Speculation is rampant!

I'm not sure why - a $300,000 house isn't better value for money when you really have to pay upwards of $400,000 in order to actually live in it.

Have you seen what's actually out there for sale for $300,000? It ain't much, and it ain't good.

 

[building babel]

Re: Speculation is rampant!

Things occasionally go wrong with any property - condo or house - and require renovation. If you're a homeowner you have direct control over where and how your reno money is spent, and you're free from the sinkhole of condo fees. But, despite the fact that so many condos have been thrown up in the last decade, I think the quality of construction of most of them is good, largely as a result of strong competition in the marketplace. And the market for condos is huge because they ain't building single family houses downtown any more, and they ain't making any more land. Hence the rapid appreciation in value of said older homes, and the fact that they are increasingly being snapped up by people with a spare 100K to invest in sprucing them up, thus further enhancing the attraction of low rise neighbourhoods.