GTA condo sales overtake supply
January to April 2016 saw 6,229 condo sales
but only 3,892 new units added, according to Altus Group.
Condominiums are becoming an increasingly important
part of the GTA's housing market mix as development
in the region grows more intense.
For those seeking affordable home ownership, a condo
is likely the only viable option, given the skyrocketing
prices of detached houses.
That is if they can find a condo to buy.
New condo sales in the first four months of 2016 significantly
outpaced supply, with 6,229 sales but only 3,892 new
units added, according to Altus Group. This has resulted
in a decline in the already limited number of new-condo
options. As of the end of April, there were only 17,698
new condos available for sale across all GTA condo projects.
That may sound like a lot of units, but bear in mind
only 1,622 of them were actually built and unsold. The
bulk of the condos, 9,801 to be precise, were in pre-construction
status, meaning three to five years away from delivery.
The remaining 6,275 units were unsold and under construction,
representing just 12 per cent of the 51,392 units being
built in the GTA and slated for delivery in the next
Prices for ground-oriented homes have been increasing
at double-digit year-over-year rates, up 11.4 per cent
to a record $864,181 in the first four months of 2016,
according to Altus Group. Meanwhile, GTA condo prices
were up 2.8 per cent year-over-year, to $461,281. On
the resale side, detached home prices increased 18.9
per cent, to $986,691, compared to a 5.9 per cent jump
in condo prices, to $413,925, according to the Toronto
Real Estate Board’s May figures.
And prices will only keep going up, as record land
costs and the introduction of new development charges
create unprecedented cost pressures for those developing
the future supply of new condos, units that won’t
be available to consumers for another two years.
For those who do manage to secure a condo, more potential
complications loom. Purchasers of units in larger projects
can find themselves in interim occupancy for a full
year, resulting in the payment of interim occupancy
fees (paying rent to stay in their own unit until the
building’s registration) that could total more
than $10,000 before they’re able to obtain ownership
title and begin paying off their mortgages.
And, with projects being designed to minimize capital
costs in order to stay competitive on selling prices,
building systems will likely require maintenance, repair
and replacement earlier than in the past. So condominium
fees after the first year of operation are likely to
Condos can offer a carefree lifestyle. But that doesn’t
mean home-hunters should be carefree when making their
condo purchase decisions.