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Any conversation in regards to Toronto’s condominium market as of late invariably turns into one that seeks to predict where the market will be by the end of 2012. Riding on the success of 2011 many real estate professionals and financial analysts have been predicting a noted decline in sales and a price correction, while developers attempt to reassure consumers that the market will invariably remain stable and bullish. Our go-to source for reliable statistics and analysis, Urbanation, has just released their Q2 press release, giving some much-needed insight as to how the market has progressed thus far.
In the resale condominium market Toronto witnessed just over 5000 transactions in Q2, the second highest quarterly total on record, with a 2.7% increase in prices, now up to $407 per square foot. Conversely the new condominium market saw 4769 units sold, down a noted 21% from Q1-2012 and a whopping 50% from Q2-2011.
Urbanation reports that most of the Q2 activity took place at the end of the quarter; 88% of those units under construction and 79% of active units moved during the end of this period, corresponding with the reduction in insured mortgage length enacted in early July. The decrease from 30 to 25 years saw many home buyers scramble to purchase before the new regulations were put in place. The number of unsold units sat at 18,123, a market high.
At the end of the day, we continue to see a rise in the average sold index price, with prices sitting at $525 per square foot, an annual increase of 7.2%. While the report includes some positive news in regards to the highpoint the market was at the end of Q2 and the number of transactions, the decline in new units sold and the substantial number of unsold units could be read as an indicator that the market is slowing down. Despite the varied market results seen in Q2, Urbanation maintains their positive outlook for 2012, forecasting 20,000 new condominium sales and 17,500 resales for year-end.
