Market News: Condo craze continues
Both record highs and near-record lows were recorded in the GTA new-home market in 2011. But what will 2012 bring? The Building Industry and Land Development Association (BILD) and market research firm RealNet Canada met recently to discuss the final GTA market results for 2011, reporting 28,466 new high-rise units sold last year. That makes 2011 a record year for the Toronto condo market, up 23% from 2010. New low-rise sales set records for other reasons: With just 17,460 new-home low-rise sales throughout the GTA — due to a lack of inventory — 2011 was the third-lowest year over the past 12 in that category. RealNet reported 45,926 new houses (worth about $22-billion) sold in 2011 throughout the GTA — the second-highest year ever.
That means high-rise sales made up 62% of new-home sales in 2011. It’s a shift: According to RealNet, in 2000 only 25% of new home sales were high-rise. We can expect movement in the same direction through 2012, says George Carras, president of RealNet Canada. “The trend will likely continue,” he said. “Based on where inventories are, you should see a continued market-share increase on high-rise.”
While Mr. Carras won’t make further predictions, he’s confirmed 41 new condominium projects scheduled for release in the first six months of 2012. While more sites may make it to the market by June, it compares with 60 new high-rise sites released through the GTA in the first six months of 2011. Yet it’s hard to know what that means for the 2012 high-rise market. Ben Myers, editor of market research firm Urbanation, suggests 2012 will likely be slower than 2011, but not by much.
“It will still likely be close to the top three years ever,” he says, citing Urbanation data. “So 2007 saw 22,500 sales — the second-highest year ever. And 2010 was at 20,500 — that’s now the third highest. I’m expecting  to be somewhere close to the numbers for 2010.”
With about 42,000 high-rise units under construction, is there a risk of flooding the market once those suites are built? It’s hard to say, Mr. Myers says, but so far he doesn’t think so. “We have about 18,000 units that will register this year, but we’re still in a seller’s market in the resale market, we’re still very much in a renter’s market in the condo rental market,” he says. “Those are both very positive. When we start to see a bunch of listings lagging and, in the resale … market see people unable to rent their units, those will be the warning signs.”
By Lisa Van de Ven, Market News