FOR
IMMEDIATE RELEASE
ATTENTION:
News; Financial; Real Estate Media
RecORD HIGH LEVEL OF CONDOMINUM APARTMENT CONSTRUCTION
STARTS IN 2012
Toronto
developers commence building 24,388 units in 104 projects
TORONTO – January 31, 2013: Urbanation Inc., the leading source of information and analysis on the
Toronto condominium market since 1981, today released its Q4-2012 market
overview.
In the
Toronto Census Metropolitan Area (CMA) there were 3,841 new condominium
apartment sales in Q4-2012, an increase of 16% over the third quarter. Overall,
17,997 new units sold in 2012, between the five-year CMA average of 20,119 annual
sales (2007 to 2011) and the ten-year average of 17,139 annual sales (2002 to
2011), but down from the record breaking pace set in 2011.
The Toronto
CMA condominium market set several records in 2012 including: construction
starts (24,388), active developments (355), total active units (89,251), and
total units under construction (56,866).
The average
sold index price in the Toronto CMA was $536 psf in Q4-2012 (up 5.2% annually),
while unsold suites were being offered at $568 psf on average in the fourth
quarter.
Overall the
active Toronto CMA new condominium market is 79% sold overall, down from 80% sold
in Q3-2012 and 82% sold in Q4-2011, but above the ten-year average of 78%.
“Despite concerns over the level of unsold
supply in the new condominium market, the ratio of sold to unsold units has consistently been above the
long-run average in recent years” says Ben Myers,
Urbanation Executive Vice President. “There remains confusion over unsold
supply and standing inventory, to clarify, at the end of Q4-2012 there were
just 613 completed and unsold new condominium apartment suites in the Toronto
CMA - some would be rented out by the developer, some used for construction
offices, and others used as model suites for subsequent phases, effectively
lowering this standing inventory figure even farther”.
Overbuilding
was a term cited quite often in relation to the Toronto condominium market in
the second half of 2012, however, a survey of developers, lenders and brokers
conducted by Urbanation in December indicated that just 11% of respondents
indicated that over supply in the new condominium market was their top concern
going into 2013.
The resale
condominium market suffered from a lack of supply in Q4-2012, as just 3.2% of
the 227,700 units (1,285 buildings) tracked by Urbanation were listed for sale
in the fourth quarter, the lowest quarterly level in over 10 years. Resale
activity declined 14% quarterly in the Toronto CMA to 2,941 transactions.
Despite the decline in resale units traded, the Sales-to-Listings ratio
increased quarterly to 40.2%, indicative of relatively balanced market
conditions.
“Many investors chose to hold and rent their
units in 2012 rather than sell them into uncertain market conditions” adds
Myers. “This is contrary to the theory that condominium unit holders will panic
and sell their suites at significant discounts during a softening market”.
Of the
2,941 resale condominium apartment transactions in Q4-2012, just 0.9% of these
suites were sold for less than 90% of the list price. These 27 units sold at an
average price of $641,000 ($282,000 over the average Q4-2012 resale price of
$359,000), indicating that most of these luxury suites were owned by
individuals with unrealistic value expectations, not investors looking to ‘cut
their losses’.
Myers adds
“We do not subscribe to the theory that a major correction in resale
condominium pricing is forthcoming, the lack of recessionary conditions, the
nearly non-existent foreclosure market, and the unwillingness of condominium
sellers to accept low-ball offers will keep prices from falling to any
significant extent in 2013.”
Overall,
15,292 resale condominium apartments traded in 2012, down from the five-year
average of 15,609, but above the ten-year average of 13,486.
Urbanation
is forecasting 14,500 resale condominium transactions in 2013 and 17,000 new
condominium sales in the Toronto CMA. 53% of respondents to Urbanation’s
industry questionnaire expected between 17,500 to 20,000 new condominium sales
in 2013, while 42% expected sales between 14,000 and 17,500.
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ABOUT
URBANATION
Urbanation is Canada’s leading condominium
market research company. Since 1981, Urbanation has analyzed the Toronto
condominium market, publishing the “industry bible” – Urbanation’s Condominium Market Survey. This
quarterly report tracks new, resale and future condominium projects. The newest
report from Urbanation is UrbanRental,
which tracks activity in the condominium rental market. Urbanation also
provides the development community with essential consulting services, which
include site and topic specific market studies and surveys.
Media Contact: Pauline
Lierman
416 922 2200
