The Greater Toronto Area (GTA) real estate market is already witnessing the green shoots of revival as several experts have stated. TREB (Toronto Real Estate Board) and other experts have confirmed how sales figures and home prices have both increased considerably in Toronto and its surrounding areas for the month of April, 2019. This clearly points to the fact that the market has already absorbed the impact of the mortgage stress test and other affordability concerns. Since the spring housing market did not quite take off like it was expected to, industry experts have stated that the April sales figures are compensation for the same.
While April statistics are balm for beleaguered industry professional and developers, they do highlight the resilience of the GTA (Greater Toronto Area) real estate market in general. The economic fundamentals of the market are firmly in place as per reports. Population growth is highly anticipated for the GTA in the near future and this will naturally create higher demand for property in the entire region. Additionally, employment levels have been stable in several areas and growing rapidly in the city of Toronto. This will naturally create more demand for housing in the market propelled by commercial realty growth. Toronto is on the cusp of skyrocketing future progress driven by its fast-growing technology sector and the advent of several companies to the city in recent years.
Condo development hits a whole new record!
Condominiums are hot property in Toronto and this is quite evident from the way a new record was achieved in the first quarter of 2019 with regard to development of these units. Several experts have reported how, in spite of launch volumes coming down with sales volumes in the first three months of the year, construction levels touched record high levels. In Q1 2019, a 10-year low was witnessed with regard to pre-sale launches. Growth in prices came down as well but the number of projects that were being constructed touched a record high by all means.
Here are some factors worth keeping in mind:
- Throughout the GTA (Greater Toronto Area), around 3,073 new condo units were sold in the first quarter of this year.
- This indicates a decline of 26% on a year on year basis and the lowest sales figures that were witnessed ever since the year 2013.
- 90% of projects that were in development had pre-sold housing units affecting sales volumes. There were just 8 new projects launched in the pre-sale format along with 1,829 units combined. This was the lowest opening count witnessed ever since the year 2009.
- The region is already witnessing the impact of an increase in new openings for the year 2017, namely 32,077 units. Many projects are now coming into the construction phase or are already in advanced construction stages.
- The record number of housing units built in the first quarter of 2019 touched a whopping 71,378 units spread across a total of 242 projects.
- This is a huge increase in comparison to 61,555 units spread throughout 221 projects which were being constructed in the same period in 2018.
- Condo prices are still going up although the rise in prices are not as much as the period between 2016-2018 when the prices for pre-sale units went up by more than 50%.
- The price growth levels are steadily witnessing an element of moderation according to reports.
- Average pricing for projects which are being marketed actively has gone up by 1.7% on a year on year basis in Q1 2019. They touched approximately $779 for every square foot.
- The 2017-18 period had prices going up by 2.9% on a quarter on quarter basis on an average.
- These volumes are indicative of the story in the Greater Toronto Area although the prices still keep growing considerably in downtown Toronto.
- Lower inventory in Toronto has led to prices going up by 13% as compared to the same period last year, touching a record average level of $1279 for every square foot.
- Average resale pricing per square foot for condominiums came down by 1.2% to $683 per square foot in the fourth quarter of 2018. This was the very first time ever since the first quarter of 2014 that prices of resale condos came down on a quarter on quarter basis.
- Inventory remained on the lower side for unsold housing units by the end of the particular quarter although the 12,232 units unsold represented a considerable rise in comparison to the 8,803 unsold units in the first quarter of 2018 which was a low point seen in 15 years.
- Supply availability for new condos touched lower than 15,003 units which was the 10-year average and the 20,689 units unsold in the first quarter of 2013 which was the record high level.
All in all, the housing market in Toronto and much of the GTA (Greater Toronto Area) witnessed a steady revival in April 2019 and the story looks to turn brighter in the near future as per reports. The record high in condo construction is indicative of the fact that there is high demand for these units and this trend should also continue for quite some time as opined by experts.