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A First - Condos Outselling Houses

High prices propel sales above 50% of total deals: A single-family detached house has long been the ideal dream for Canadian homebuyers.

However, in case you couldn't already tell by all the construction cranes dotting Toronto's crowded skyline, 2007 has become the year of the condo.

New condominium sales in the Toronto area officially passed the 50-percent mark for the first time, outselling new low-rise homes, according to numbers released by the Building Industry and Land Development Association.

"This is really unheard of.  Low-rise homes were always the preferred choice, but it shows you how much the market has changes," Stephen Dupuis, chief executive of the association, said in an interview.

The average new condo price is now $347,207, up 8.6 percent from last November.  Low-rise homes saw a price increase of 6.8 percent to $429,673, according to a copy of the report obtained by the Toronto Star.

Historically, from one-quarter to one-third of all new homes sold were condos, Dupuis said.  But over the years, that ratio has risen sharply, with condos taking the lead and making up 52 percent of all new homes sold. 

"When condo sales were 45 percent of the market last year, we thought we'd never see another year like that," Dupuis said.

In the first 11 months of 2007, 22,059 condos were sold, smashing the previous annual record of 17,561, set in 2005.  Analysts say affordability is one of the main drivers of the condo market, as buyers priced out of the single-detached segment set their sights on something more financially manageable.

"The $82,000 difference in price between an average low-rise home and a condo goes a long way to explaining the high-rise market strength," Dupuis said. 

"The suburban type home with the big lot has gotten so expensive, people are backing into the condo market."

Thanks to the strength of the condo market, overall new-home sales that were forecast to be 10 percent less this year then last, will likely be 10 percent higher, said association president Bob Finnigan.

"New condos are selling like hotcakes, it's as simple as that," said Finnigan.

The Toronto Real Estate Board reported that, during the first two weeks of December 2007, home resales in the Toronto area topped the 90,000 mark for the first time.  Nationally, the Canadian Real Estate Association said home resales broke the annual record in the first 11 months of the year.

Despite the strength in sales, analysts say 2008 will see fewer sales of homes and more moderate price appreciation, expecting the average resale home to appreciate by 3.5 percent.


Posted on Thursday, May 15, 2008 at 04:06PM by Registered CommenterElaine in | Comments2 Comments

Reader Comments (2)

Great article, with some very useful info in here. It may also be of interest that the CMHC just released their Q2 2008 Canadian housing market outlook and their updated forecast for the Toronto are are:

MLS sales: 84,000
MLS average sales price: 394,000

MLS sales: 77,000
MLS average sales price: 404,000

I've added this info here if anyone's interested:
May 16, 2008 | Unregistered CommenterKelvin Mangaroo
I think that for every Toronto real estate company the key word is the condominium. This rise in sales of the condos could have been expected as young couples, potential first-home buyers, prefer to stay closer to their workplaces, practically this type of living is more appropriate for them. However I hope that the summer will be a more favourable period regarding the detached houses.

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