A shortage of available, affordable single-family homes has more prospective buyers in search of housing solutions looking to the heavens — or at least to condo apartments, suggests a recent report from Urbanation.
New condo sales reached unseen heights in the 905 during the first quarter of the year, hitting a total of 2,112 transactions. Meantime, 416 transactions came close to record levels as buyers snapped up 5,615 new condo apartment units from January to the end of March, according to the real estate data firm.
“More and more buyers priced out of the single-family home market are looking for alternatives in the condo market, providing a clear opportunity for new development,” says Shaun Hildebrand, Urbanation’s senior vice president, in a statement.
The previous quarterly record for the 905 was set in the third quarter of 2011, then 1,821 new units were sold, he tells BuzzBuzzHome News in an email.
The 905 market with the highest number of new condo sales was Vaughan, which saw homehunters purchase 716 units, representing a 305 per cent year-over-year increase.
Markham, another market bordering Toronto to the north, followed at 482 sales, up 190 per cent from a year ago. Sales in Mississauga over this period were up 110 per cent to 225 units.
“After several consecutive quarters of rising absorptions, unsold inventory has recently reverted back to normal levels, which has allowed more projects to launch in these markets,” says Hildebrand when asked about what makes them popular for buyers.
“The success of these new projects is a reflection of the widespread availability and affordability issues plaguing the low-rise sector across the GTA, as well as increased interest from investors looking farther afield after a lack of new launches in the core lately,” he adds.
Eleven projects were launched during the past quarter across the 905, bringing a total of 2,343 units to market and pushing the sales total higher as 61 per cent of these had sold by the end of March, according to Urbanation.
New condo sales activity throughout the 416 was up 32 per cent compared to the same time in 2015. The transactions tally came close to the 2012 first-quarter record of 5,680 sales, Urbanation noted.
Four condo projects were launched in the 416 in this year’s first quarter, according to Urbanation, accounting for 718 units and “limiting sales growth in the 416 area to 7 per cent.”
The index selling price for new GTA condos rose 3 per cent to $582 per square foot in the 12 months ending in March.
While resale condos remain cheaper per square foot at $467, prices for these older apartments are rising faster, with annual growth reaching 8 per cent last quarter on a year-over-year basis.
“New condo prices have been held back by a lack of new launches in the core and a shift in activity to suburban areas,” said Urbanation.