Jennifer Paterson – Canadian Real Estate Wealth

Condo investment in the Greater Toronto Area has reached a level not seen in two years, according to market statistics.

Urbanation’s recently published market results found that a total of 4,753 new condos were sold during the third quarter of 2014, representing the third best summer for the market, behind 2011 and 2007, and a 53% year-over-year increase from a 10-year low in 2013.

These figures signal a light at the end of the tunnel, two years after finance minister Jim Flaherty tightened up the rules around insured mortgages for condos, which cooled sales for a while.

Comment: Not really. There was a lull when there weren’t as many projects launched. Especially in 2009, after the financial crisis, many developers held back. Then they launched a lot in 2010 and 2011 – thus the huge numbers in 2011. There were some big land sales deals in 2012 and 2013, which led to more project launches and thus more sales in 2014. It really had nothing to do with the mortgage rule changes.

Matt Elkind of The Condo Store Realty, says: “We had a lot of negativity in the marketplace when Flaherty changed the condo rules. It wasn’t that sales were bad, there just weren’t as many projects coming to market.

Comment: See?

“Developers put projects on hold and weren’t as aggressive in launching new projects because they were worried about these changes.

Comment: I told you.

“But they have seen consistently strong responses from investors. It’s indicative of a very buoyant market where the demand for good product is extremely strong.”

The report also found:

* The share of total active condos in development that have been pre-purchased has reached a record high, with 104,081 pre-purchased units actively in development in the city, a share of 84% of Toronto’s condo market.
Comment: That is an average for all non-completed projects. From just a sales centre all the way to 99% built. And most are sold.

* The number of unsold units in the market across all stages of development (pre-construction, under construction and recently completed) fell by 11% during the quarter to 16,743 units.
Comment: Which should quite another lot of naysayers. Unsold inventory is falling fast.

Shaun Hildebrand, senior vice president of Urbanation, says: “Sales this past summer reaffirm that the new condo market in Toronto is on track for one if its best years on record.

“There is still quite a bit of pent-up demand that came out of the slowdown last year. Should market confidence continue to hold in spite of the recent turmoil in financial markets, this sales momentum will carry into the final months of 2014 and early 2015.”

Comment: A recap. More project launches this year mean the 3rd best summer for new condo sales ever. Average pre-sales are 84% for all condos not yet complete. Unsold inventory is down 11%. TONS of great news for the new condo market.

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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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