The Numbers Behind the Condo Boom
By Lucas on Oct 10, 2012
We came across an infographic on the Globe and Mail’s website called “Toronto Condo Boom.” The infographic displays how many condo units were “built” in 2012 compared to 2007 throughout selected Census Metropolitan Areas (CMAs), as of June 2012.
We were instantly confused by the numbers reported on the graph. The second and tallest bar of the graph represents Toronto 2012, where apparently, there have been “44,832 units built,” and “37,247 of those units sold, leaving 7,585 units unsold.” For some reason, it is very difficult to believe that 44,832 units reached completion in six months.
To make sure we weren’t just reading the infographic incorrectly, we contacted Ben Myers via email to help explain the data being displayed. Myers cleared everything up stating that the data in the infographic is actually referring to “active units” in the new condo market, which includes preconstruction, construction, and completed units.
Myers went on the explain that as of the end of June 2012, there are 162 active projects in Toronto, with 45,900 units, of which, 36,954 have sold - leaving 8,946 units unsold.
Despite the numbers being a bit skewed and the wording kinda off, the infographic asks an interesting question: Is Toronto’s condo market overheated?
Last July, we sat down with Ben Myers of Urbanation to discuss the current condo market in Toronto, and one thing he said was, “We had 28,000 suites hit the market last year, and conservatively speaking, 18,000 to 20,000 of those were bought by investors.” This means that in the coming years, Toronto might have a very strong resale market, and an even stronger rental market, which could possibly drive the price down for all condos. When supply overpowers demand, prices drop.
But the truth is, there are between 90,000 to 100,000 people moving into the CMA each year, and no one knows how many units we really need to accommodate this kind of population growth.
Whether or not the supply is overpowering the demand is yet to be seen, but the fact that the CMA’s population is gradually growing every year proves that builders and developers won’t be hanging up their hats anytime soon.
