Supply of New Condo Units Drop to Six Year Low
According to a new report from Urbanation Inc., there were 7,731 new condominium apartments sold across the GTA during the second quarter of this year, a 26 per cent increase year-over-year. This represents the second-highest level of quarterly activity on record following the 8,548 condo sales in Q2-2011.
The report suggests the number of sales would have been higher if supply had kept pace with demand, as the number of new projects fell nine per cent year-over-year to 5,106 units. As a result, unsold inventory in development dropped 26 per cent annually to 13,528, resulting in the lowest record since 2010.
The average selling price for a new condo unit grew two per cent year-over-year to $582 per square foot. Price growth was stronger in the downtown core with sold index prices up four per cent annually to $662 per square foot and the cost of unsold units increasing seven per cent to $724 per square foot. In the resale market, condo unit prices increased 10 per cent year-over-year to $498 per square foot.
“With demand for condos in the GTA pressing forward strongly, new projects are being challenged to enter the market in greater volume,” said Shaun Hildebrand, Urbanation’s senior vice president, in a press release. “Should current conditions persist, price pressures for high-rise units can be expected to build, particularly as low-rise housing remains afflicted by record-low supply.”
Urbanation examined the top 20 selling new condominium projects to determine the distribution of sales by unit type. Two- and three-bedroom units represented 44 per cent of condominium units sold in Q2-2016, representing a shift toward demand for larger units. Meanwhile, sales of one bedroom and one bedroom plus den units fell five per cent and 11 per cent over the past five years, respectively.