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Sales tower above records

Lisa Van de Ven
National Post
December 17, 2011

Preliminary results indicate best year yet

If their New Year’s resolutions involved selling more suites, Toronto’s condominium developers got that and more in 2011. While the final sales numbers for the year are still to be determined, the Greater Toronto Area’s condo market has already reached record highs this year, beating out 2007’s former record of approximately 22,500 condo sales.

Ben Myers, executive vice-president and editor of market research firm Urbanation, the Toronto CMA should see high-rise sales of about 26,000 to 27,000 units by year’s end.

But what’s the story behind the numbers? What were the biggest trends that kept the Toronto condo market hopping through 2011?

1. The expansion of the 905 “The pricing of low-rise housing in those markets is really shooting up,” Mr. Myers says. The answer? More condo growth, with larger developments. They’re the types of projects the 905 has been short on before: large sites with great amenities and top-rate features. In other words, they’re what Mr. Myers calls “sexy” — and they’re certainly getting attention from buyers.
2. Less low-rise When the Building Industry and Land Development Association (BILD) released its latest sales numbers (supplied by RealNet Canada), the discrepancy was clear. From January to October, there had been 15,056 low-rise sales throughout the GTA, compared with 23,747 high-rise purchases. “The numbers speak for themselves. There’s a shortage of low-rise inventory,” says Joe Vaccaro, acting president of BILD. Municipalities are encouraging intensification, and the result is less new-build low-rise and more new condominium units. “All of these greenbelt legislations are putting a hold on supply in that market,” says Mr. Myers. “And obviously when there’s less supply, pricing goes up even quicker, too.”

3. Smaller suites Sometimes it’s just a numbers game. With the price-per-square foot increasing in condos throughout the GTA, especially downtown, developers are opting to offer smaller suites to keep prices affordable for first-time buyers. “The more small suites, the more units you can fit into some of these buildings,” says Mr. Myers. “That translates into more sales as well.”

4. Investor action Investors are coming out to the sales centres in droves; in fact, some buildings have been 90% to 100% investor purchased. “It really reflects Toronto’s place in the global economy,” says Mr. Vaccaro. “It has been recognized as a safe place to invest, and we’re seeing that internationally — money is making its way into Toronto. And real estate is a hard asset that foreign investors support and have an appreciation for.”

So what can we expect from 2012? At press time, Mr. Vaccaro expected anywhere between 40 and 80 new condo projects to be released through the new year. Mr. Myers was still working on his final forecast, but offered his best estimate so far. “I don’t think we’re going to get another record next year but I certainly expect that things will continue on a fairly rapid pace,” he says. “Off the top of my head, I’m expecting probably around 20,000 sales.”

 

Posted on Friday, December 30, 2011 at 02:08AM by Registered CommenterElaine in , , | CommentsPost a Comment

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