Last month was best-ever March for new condo sales.

Susan Pigg – Toronto Star

New home and high-rise condo sales have rebounded from last year’s dramatic slump and exceeded 10-year averages for sales in the first quarter of the year, says research firm RealNet Canada.

Comment: I am not sure I would call last years new housing sales a “dramatic slump”. There were 28,406 new housing (house and condo) sales in 2013. Comparing it to the record 2011 numbers is unfair.

Low-rise home sales – which have hit record lows over the last two or three years – were up 51% in the first three months of 2014 over the same period last year.

Comment: Yes, because the ratio of low-rise to high-rise keeps shrinking as developers build more condos and fewer houses. That trend is going to continue. It does not mean there is some disaster in the making in the new home building industry.

High-rise condo sales saw an even bigger uptick, coming in 68% above the same quarter of 2013, when the industry was in a significant downturn.

Comment: All real estate slowed down from July 2012 to May 2013 because of the new mortgage rules. Comparing this spring to last spring skews the numbers and makes this spring look higher than it should be. March 2014 had 2,139 high rise sales, 144% higher than March 2012 – but only 39% more than March 2011. Context people…

The sale of 4,962 condos in the first three months of 2014 far exceeded the quarter’s 10-year average, 3,675. In fact, it wasn’t far behind the record 5,372 condos sold in Q1 of 2011, which would go on to become the peak year for condo sales across the GTA.

Comment: Now we are cherry-picking. You are comparing March 2014 to March 2013, but then Q1 2014 to the 10-year average. You have to keep the stats the same for the numbers to have any meaning.

Last month was the best March ever for high-rise condo sales, with transactions up 105% (to a total of 2,496 units) over the same month last year, and up 42% over the 10-year average, said RealNet president George Carras in releasing the statistics Wednesday.

Comment: Weird, according to BILD, there were only 2,139 condo sales last month.

The index price of a highrise condo was up 1% in the first quarter, to $436,989, said RealNet. The index price of a new low-rise home in the GTA was up 3% in the quarter, to $657,961.

That means the gap between the index price of a condo and a house has now grown by another 7%, to $221,063.

Comment: And it will only grow larger as more condos are built and houses become ever more scarce, new or resale.

The inventory of unsold units continues to grow – it’s now at 30,898, with more than 22,000 of those high-rise condos rather than low-rise homes, said RealNet. And most of those unsold condo suites have yet to even be built.

Comment: So there are maybe 10,000 out of 60,000 condos being built that are not sold. That means more than 83% ARE sold. It sounds scary when they put it that way, but when you do the math you can see that it is totally normal.

New unit sizes continue to shrink – they now average less than 800 square feet across the GTA – as developers try to keep costs down in the face of higher development fees and other costs.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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