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2013 marks a year where condominium developers are looking to sell unsold units in already launched projects, while keeping down the number of new launches. It has been know that sales at new Toronto condominium developments have slowed; now we know from Urbanation, a real estate market research company, that sales are down 18% for the second quarter of 2013 over the same time the previous year.
A total of 3,903 new condominium apartments were sold in the second quarter. The number is in line with the number of new units opened during the quarter, bringing some balance to the market. 29 new projects were launched in the past six months of 2013, nearing a record low for the past decade.
“The market is regaining its footing coming out of an extremely volatile sales environment during the past two years. Developers have been cautious, but the success of some key projects this year and the solid performances of the resale and rental condo markets in the second quarter should improve confidence” said Shaun Hildebrand, Urbanation’s Senior Vice President.
The amount of unsold units rose to 19,394 out of a total of 92,398 total active units, meaning 79% of units in the process are sold. The majority of the unsold units—11,625 of them—are still in the pre-construction phase of the process.
The average index price grew by 2.6% annually in the second quarter to $539 psf, similar to the pace recorded in the first quarter. The average unsold index price was the same as a year ago at $566 psf.
"Pricing at new projects has become more competitive, which will continue to attract more attention from buyers. Sales are expected to show further improvement in the second half, but the total for 2013 will be below recent benchmarks,” added Hildebrand.
Resale condominium sales for the quarter was 4,689 units, 7% lower than a year ago, but still in line with historic second quarter numbers. Average annual price appreciation grew to 1.5% after experiencing mild declines during the previous two quarters. Average index resale prices also reached a record $413 per square foot, or $376,000 for the average price of a 910 square foot unit. The sales-to-listings ratio increased to its highest level in a year (46%), as growth in total listings remained slow despite over 8,500 units being added to the resale universe in the first half of 2013.
