New condo sales in the GTA hit an all-time high in 2016
By Lucas on Feb 02, 2017
Urbanation, the most trusted source in the Greater Toronto Area (GTA) for new condo market intelligence, released its fourth quarter figures for 2016, announcing a record year for new condo sales.
In 2016, there were 27,217 new condo units sold in the GTA, which is a 34% year-over-year increase. Surprisingly, 2016 broke the 2011 sales record with fewer pre-construction launches. In 2011, there were 28,204 launches, and in 2016, there were only 18,466.
In the fourth quarter, new condo sales jumped 18% to 7,422. With new launches on the decline, unsold inventory dropped 47% to a 10-year low of 9,932 units. That’s only 4.4 months of supply, and according to Urbanation, a balanced market should have about 10 months of supply.
Sales growth in the 905 was tremendous. Compared to 2015, new condo sales went up 82% closing the year with a total of 8,703 for a 32% share of sales across the GTA. Outer 416 areas (Scarborough, Etobicoke, North York) saw a 57% increase in sales for a total of 7,397.
New condo sales in the City of Toronto only went up 3% for a total of 11,116, and there was a 40% decrease in launches. Old Toronto saw the largest imbalance between supply and demand with unsold inventory dropping 57% to 3,503 units. That’s only 3.8 months of supply.
“The new condo market is experiencing broad-based demand that will carry forward in 2017,” says Shaun Hildebrand, Urbanation’s Senior Vice President. “Buyers priced out of the low-rise segment, a surge in rental demand, and increased attention from investors are placing heavy downward pressure on condo inventories, which will support strong price growth this year.”
New condo prices soaring in Toronto
The overall price index for sold units in active developments grew by 3% in the fourth quarter of 2016, reaching $598 per square foot. This price growth was impacted by a buyer shift to lower priced suburban markets.
The average selling price in the City of Toronto for projects launched in 2016 increased by 14% to $746 per square foot. By the end of the year, the remaining inventory in projects launched last year were available for approximately $795 per square foot.
For 2017, Urbanation is forecasting around 23,000 new condo unit sales across the GTA, presuming developers will answer demand and launch more projects. It’s interesting that Urbanation is anticipating more launches but lower sales than 2016. Looking at the spikes in sales in 2007, 2011, and 2016, we think it’s pretty safe to assume that Urbanation has hit the nail right on the head - 2017 will have fewer sales than 2016.
Hopefully we do see an increase in launches to balance out the supply and demand levels. Both Urbanation and the Toronto Real Estate Board (TREB) have brought attention to the more affordable new condo markets in suburban areas. Will the strong trend of new condo buying in the 905 continue throughout 2017?
