Thought this market was done? Think again
Investors may have written off this busy housing market, but new data suggests those who put their money in it will likely earn major profits.
The Toronto condo market – which many argue has been over-built – recorded a drop in inventory and an increase in demand in the first quarter of this year.
According to Urbanation’s Q1 market results, a total of 5,615 condo units were sold in the GTA during the first quarter, up 32% year-over-year and just shy of the first quarter record of 5,680 set in 2012.
“The inventory shortage experienced for low-rise housing has spread into the high-rise segment,” Shaun Hildebrand,
Urbanation’s Senior Vice President. “More and more buyers priced out of the single-family home market are looking for alternatives in the condo market, providing a clear opportunity for new development.”
Increased demand and a supply shortage forced unsold inventory to drop 16% year-over-year to 15,587 units. The decrease was even more pronounced in the city of Toronto, which saw its unsold inventory fall by 22%.
Supply also tightened, with 86% of units in development being sold; pre-construction projects were 70% sold; recently completed buildings were 96% sold.
There was also good news for investors looking to sell.
Resale activity increased by 21% year-over-year and total listings declined by 5%.
“In a sign that price pressures are starting to build, projects under construction increased their asking prices for unsold units by 8% from last year to $618 psf, including a 14% jump in the former City of Toronto,” Urbanation said in a release.