Over the past year we have seen a pronounced decrease in market activity compared to the activity seen at height of the condo boom a couple years back. While numbers have been on the decline as of late, Urbanation’s Q3-2013 Analysis, released earlier today, reveals a rebound in the resale condominium market as well as improved sales of new units. Figures show that a total of 3,049 new condominium apartments were sold in Q3. While new condo sales registered an 8% drop from last year’s Q3 report, the numbers represent the smallest annual decline recorded in the condo market for more than a year.
Factoring in current sales trends and the expected number of launches for Q4, new condo sales are expected to tally up to a total of approximately 13,000 units in 2013. Compared to massive sales recorded in 2012 and 2011 (17,997 and 28,190 respectively), the estimated total for 2013 brings sales levels back in line with the historical trend once figures for the past three years are averaged out. “The softer numbers this year should be viewed in the context of the exceptional strength that preceded them. While the recovery towards more normal volumes has been gradual, the industry continues to make the necessary adjustments required to maintain stability in the market” said Shaun Hildebrand, Urbanation’s Senior Vice President.
Aside from numbers seen during the height of the recession in 2009, Q3 saw the lowest number of project openings of any third quarter period over the past decade (11 projects totaling 2,557), which had the positive side effect of bringing down unsold inventory to under 19,000 units for the first time in a year. While sales and new projects across the GTA have hit a rough patch, projects in the downtown Toronto submarket continue to see strong sales, with 85% of units in active development pre-purchased and a 22% increase in sales during the third quarter.
The average sold index price saw a 2% annual rise to $540 per-square-foot, consistent with the pace of growth recorded during the first half of the year. The average unsold index price declined by 1.5% from last year’s figures, to an average of $565 per-square-foot.
New project launches have been steadily decreasing in frequency, but the resale condominium market is making a significant rebound with sales totaling 4,207 units in Q3-2013, up 23% from Q3-2012 - the first quarter after the introduction of stricter guidelines for mortgage insurance. Average resale index prices saw an annual increase by 1.5% to $413 per-square-foot, which would translate to $366,000 for the average sized 887 square-foot unit traded during the quarter. The sales-to-listings ratio increased to 42% from 38% a year ago, despite 16,000 units registered over the past year.