Urbanation's 2011 Condominium Apartment Forecast for the Toronto CMA" just out today:
"Despite a mild summer for new condominium apartment sales in the
Toronto Census Metropolitan Area (CMA), sales at several new project
launches in October were very strong and the CMA remains on pace for
the second highest annual sales total on record.
The 19,000 new condominium sales projected for 2010 are well back of
the 22,654 sales recorded in 2007, but top the approximately 14,500
sales realized in both 2008 and 2009. Based on historical data published
in Urbanation’s quarterly Condominium Market Survey, we believe that
16,000 – 17,000 annual new condominium apartment sales is a
sustainable level of sales for the CMA. As will be the case at the end of
2010, the Toronto CMA market has the capability to absorb more than
16,000 – 17,000 units on an annual basis, but the major problem lies in
financing and building such a high volume of suites. Secondarily, there
are concerns that the number of tenants with the financial wherewithal
to afford these high-rent suites offered by the ever increasing share of
investors will inevitably shrink as more units are delivered, and prices in
the new condominium market continue to rise rapidly.
The trepidation regarding condominium apartment tenants has been
fodder for analysts in this market for several years, however with
approximately 18,000 condominium completions in the CMA in 2010
(almost twice as many as 2009), there will be much greater competition
for these tenants than ever before. However, Urbanation does not
believe that these factors will have a significant dampening on new
condominium sales in 2011.
From discussions with developers and brokers, there is confidence that
no major correction in sales or pricing is forthcoming, and they plan on
bringing 15,000 to 16,000 new condominium units to market next year..."