After floundering through 2020, the Greater Toronto Area's condo market has been rebounding in full force this year. This resurgence in investment has been gaining steam since last year, and a market leap in the first quarter of 2021 shows no apparent signs of slowing.
Q2 is bringing even more success for the market, laid out this week in a report from industry experts Urbanation, who have been crunching condo market numbers for four decades now.
Data for the second quarter shows how the region's housing market is emerging relatively unscathed from its sudden crash during the lockdowns early in 2020, with booming sales resulting in the third-highest number of transactions ever recorded during a second-quarter in the GTA.
GTA New Condo Sales Reach Third Highest Level on Record in Q2https://t.co/sKud9tIUMD pic.twitter.com/isTAzhJ5Z8
— Urbanation Inc. (@Urbanation) August 3, 2021
Sales of single-family homes have really taken off during the pandemic, but it appears demand for new condos is back and just as strong as ever.
A total of 9,001 new condominium units changed hands in the region during the second quarter, an impressive 5.5 times higher than the 1,637 units sold during the pandemic-stricken second quarter last year.
Q2 2021 fell just shy of the second busiest on record when 9,075 new units were sold in the second quarter of 2019.
Affordability has given the 905 region an edge over the 416 in condo sales this year, triggering what some have described as a mass exodus from the city. The trend continued in Q2, with 58 per cent of all GTA condo sales in Q2 occurring in Toronto's suburbs and satellite cities.
This trend has buyers shying away from Downtown Toronto condos, where sales for new units have been less than stellar this year.
"The second quarter showed that the GTA new condominium market not only fully recovered from COVID-19 but also returned to near record-high sales volumes. The 905 continued to be a driving force as developers and buyers have shifted to more affordable locations of the region," says Shaun Hildebrand, President of Urbanation.
New units are clearly a hot commodity, but the resale market is also attracting an influx of buyers. Almost 7,800 resale units sold in the second quarter represented a healthy 148 per cent jump over last year's dismal second quarter.
Almost as many new condos were launched in Q2 as were sold, with 8,490 units achieving a record-high absorption rate of 81 per cent. The average price for these units was $728,160 GTA-wide, with launch price averages of $834,504 in Toronto and $661,537 in the 905.
Price acceleration has been a concern for a long time in the GTA, the commodification of housing making the market more hospitable for investors than actual end-users.
Urbanation's Q2 data really drives this point home, showing a 9 per cent increase in the region-wide price per square foot for average resale condominium prices. Price appreciation was most robust in the 905, echoing the suburbs' growing demand over the 416.
Unsold inventory is plummeting as buyers emerge from hibernation, dropping 10 per cent in the quarter. The 11,716 unsold units marks the lowest number seen in eleven quarters and a comfortable 23 per cent below the 10-year average.
"With inventory approaching a three-year low, expect further upward pressure on new condo prices in the near-term," says Shaun Hildebrand.
All the cranes dotting the skyline throughout the region are a clear sign of another record broken in Q2 2021. The number of new condos under construction climbed by 11 per cent year-over-year to a record-high 86,346 units.
It seems that after enduring the darkest storm the housing market has seen in a decade, the boom days could be returning.
They could also be short-lived, with all three of the leading federal election candidates pitching some form of plan to curb the housing crisis that could put a damper on the market's successes.
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