Solid Third Quarter for Condo Market
November 24, 2011
Urbanation recently released the Q3 2011 market overview, highlighting the yearly new condo sales which are on pace to break the 2007 sales record.
The new condo market in the Toronto Census Metropolitan Area (CMA) continues to rise, with this year’s third quarter marking the fourth consecutive quarter in which sales have topped 5,000. The Q3 topped out at 6,318 new condominium sales in Toronto CMA. The 2011 sales mark an increase of 66 per cent over the third quarter sales in 2010 (3,805), but are a decrease from the record sales of Q2-2011 (9,445).
Urbanation has recorded a total of 27,244 sales in the past 12 months, while new condo sales through the first nine months of this year have already surpassed 2010’s year-end total, 20,964 versus 20,491.
Ben Myers, Urbanation Executive Vice President and Editor says, “With these unprecedented sales successes continuing and with the increased investor activity, there are concerns that pricing will, or is, rising too rapidly on speculative buying decision. However, annual index price growth remains below the five-year average of 8.1 per cent, at 7.4 per cent in the new market, and equal to the five-year average in the resale market (7.6 per cent increase).”
Roughly 58 per cent of the CMA sales in the third quarter of 2011 were realized in 33 new site openings (3,694 sales) as newly launched projects are continuing to sell and attract new buyers.
Myers is quick to point out that data indicates the investor market is comprised of more long-term micro-landlords than short-term speculators, responding to concerns about the amount of investment activity in the Toronto area.
“The majority of buyers that do not intend to occupy the suite they purchased are adopting long-term investment strategies and avoiding short-term market price fluctuations resulting from potential over supply or other factors,” Myers notes.
Urbanation monitored a total of 346 new condo projects in the third quarter of 2011, which translated into an increase of 18 per cent annually. There were 5,364 construction starts and 1,607 completions in Q3 2011. There was a record high of 42,573 units under construction in the Toronto CMA.
Urbanation predicts that the CMA will break the annual sales record of 22,654 recorded in 2007, with roughly 26,000 sales expected by years-end.
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