According to Urbanation Inc.’s Q3-2015 condo market results released Nov. 5, a total of 4,031 new condominium units were sold across the Greater Toronto Area in the third quarter of 2015, which is a 13 per cent decline from the same period last year, although it remains in line with the 10-year average. Activity remained likely to meet the target of 20,000 condo sales this year, consistent with the market’s long-term course, making it one of the best years on record.
The level of unsold inventory in the development phase remained steady at 16,472 units year-over-year. When measured against sales over the last year, the unsold inventory equaled 9.8 months of supply, the lowest it has been in three years. The percentage of total units that were pre-sold in active projects reached a record high of 85 per cent in the third quarter, an increase from 82 per cent in the same period last year, and 78 per cent in Q3 of 2013. According to Urbanation, the inventory of completed and unsold units increased by 241 over the last year to 1,529 units. There were 6,177 total units completed in the third quarter, 93 per cent of which were sold. On average, 95 per cent of newly completed units are sold.
“The 20,000 a year pace the market has settled into appears to be the right level for the GTA. It’s consistent with household demand, while also leaving some room for the growing trend of new rental development,” said Shaun Hildebrand, Urbanation senior vice president, in a press release. “Nonetheless, the new condo market remains highly competitive, with new projects having to carefully weigh timing, product positioning, location and pricing.”
Price appreciation for new condos sat at two per cent annual growth in Q3, reaching an average index level of $569 per square foot in sold units. Annual resale price growth reached 7.3 per cent to an average of $457 per square foot while sales grew by 15 per cent annually to 5,574 units, a record number for Q3. Resale price growth has increased due to the seller’s market in place, as the sales-to-listings ratio grew from 47 per cent to 51 per cent annually. Lower mortgage rates, higher single-family home prices and a low number of resale listings in new projects have caused increased competition among buyers.