There were 9,932 new condo apartments sold in the GTA in the first quarter 2017, up 73 per cent year-over-year and marking a new quarterly high, according to Toronto condo market research firm Urbanation. The boost in sales is thanks to record demand and double the condo launches versus in 2016. A total of 6,293 new units were launched for pre-sale in the first quarter of 2017, compared to 3,061 units in the same period one year ago. Meanwhile, inventory of unsold condos in development plunged by 61 per cent annually to 6,481 units — the lowest level of the past 15-year condo boom.
With only 2.5 months of inventory on the market, new launches would need to substantially outweigh sales going forward to bring the market into a balanced state of 10 months.
A record 94 per cent of units in development were pre-sold in Q1-17, up from 86 per cent in 2016 and 84 per cent in 2015. A total of 80 projects became completely sold out during the quarter, more than three times the number of projects that sold out during the same period a year ago (25). Among projects with remaining inventory, there were on average 25 unsold units, with a median level of 10 available units per project. Both figures are half what they were two years ago.
New condo apartments far surpassed resales in the first three months of 2017, which increased 24 per cent year-over-year to 6,203 units. Resale condo activity was restrained by a seven-per-cent annual decline in total listings, at 8,360 units. The ratio of sales-to-listings reached a Q1 high of 74 per cent, up from 56 per cent last year, while the average days on market fell to an all-time low of 15 days, less than half the average (31) in Q1-2016. The average resale condo selling price rose 24 per cent annually to $510,000, while the average price per sq. ft. increased by 28 per cent to $598.
Following the recent strength in condo price appreciation, Urbanation notes an increase in resale activity within newly completed buildings, as well as more units re-appearing on the market within shorter time-frames. Within new projects completed and registered over the past two years, there were 1,059 sales in the first quarter, representing 17 per cent of total resales during the period and growing by 69 per cent year-over-year. Furthermore, 249 resale condos sold for the second time within the past 12 months, up 53 per cent over 2016 figures.
“The shortening of holding periods for some condo buyers is an outcome of the rapidly accelerating market,” says Shaun Hildebrand, Urbanation’s senior vice-president. “Although the share of short-term condo market participants still appears relatively low, it will be important to monitor the situation closely going forward as market conditions evolve.”