Toronto condo sales take a dramatic drop as prices rise
Condo prices continue to rocket up the steep and unpredictable mountain that is Toronto's real estate market — and conditions are looking pretty fair for the journey to continue upwards.
New data from the GTA Building Industry and Land Development Association (BILD) shows that the benchmark price for new condominium apartments rose 39.4 per cent last month over March of 2017, to an average cost of $742,801 per unit across the GTA.
This means that, within just one year, the cost of buying a new condo has increased by almost 40 per cent. Meanwhile, sales of new condos have dropped off of a cliff.
Only 1,649 condominium apartments sold in low, medium and high-rise buildings, stacked townhouses and loft units this March, according to BILD, vs. 4,329 units a year earlier.
This represents a year-over-year sales decline of 67 per cent, and the hot hot housing market of early 2017 can only be blamed in part for the dramatic numerical dip.
New home market in the GTA quiet in March as buyers exercise caution, inventory shrinks. Read our new home market data release: https://t.co/tvx70uC44z #housingsupply #housingaffordability pic.twitter.com/IWn6oMxApJ— BILD (@bildgta) April 24, 2018
Sure, the market has cooled off a lot in recent months thanks to measures like the Ontario foreign buyer tax and federal mortgage lending guideline changes, but condo sales were still down 21 per cent last month from the 10-year average.
And yet, somehow, the prices of condo units keep on rising higher and higher. How?
"The supply of both condo apartments and single-family homes dipped again in March," reads the organization's report from this week.
"Based on the pace of sales in the past 12 months, this is about four months’ worth of inventory, while a healthy new home market would have nine to 12 months’ worth of inventory."
The benchmark unit size for new condos has also gone up, according to BILD, from about 800 square feet a year ago to 900 square feet as of last month.
The price per square foot has also increased over the past year from $666 to $825, further driving up the cost of purchasing a new unit.
Despite soaring prices, the firm that provides BILD with market intelligence believes that condo sales will recover.
"Some of the demand that might have normally occurred this year was brought forward last year, helping to set a record year for condo apartment sales in 2017," says Altus Group Executive Vice-President Patricia Arsenault.
"After an adjustment period, we expect the monthly pace of condo apartment sales to improve."
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