It looks like condo buyers are looking to the outskirts of the Greater Toronto Area in search of relatively affordable condo units.
Urbanation released its condo market results for the second quarter of 2019, reporting that there were 8,902 condo sales in the GTA, which is an increase of 77% year-over-year. This was the second highest Q2 behind Q2-2017 when there were 11,413 sales. The strong Q2 followed a slow first quarter, so the total sales for the first half of the year is 11,967, which is actually slightly higher than the 10-year average of 11,205.
In Q2-2019, nearly 11,000 new condo units launched for pre-sale. Total unsold inventory increased 46% to 14,587 units, which is just 6% below the 10-year average, and amounts to 7.8 months of supply. This is a large increase compared to the 5.3 months of supply in Q2-2018.
Urbanation says the strong sales growth was driven by low borrowing costs, an increasing population, a healthy job market, tight resale conditions, and the strong demand for relatively affordable housing.
The average price for sold units in active projects increased 10% year-over-year to $797 per square foot. The average price for available condo units in active projects in the GTA increased 9%, hitting a record high of $1,000 psf.
Of the units that launched for pre-sale in Q2-2019, those priced under $900 psf sold 65%, while those priced above $900 psf sold 54%. On the outskirts of the GTA-Hamilton region, units launched for under $600 psf sold 68%. The greatest absorption was in the outer 416 and 905 areas, specifically near transit, where condo units priced from $800 to $900 psf sold 69%. For condo units priced from $900 to $1,000 psf, the absorption rate fell to 58%, and units priced higher than $1,000 psf dropped to 50% sold.
Looking at the former City of Toronto, only six projects launched in Q2-2019, and only 44% of the 2,226 units sold, making up just 19% of GTA condo sales. The average price was $1,284 psf, which is much higher than the outskirts of the GTA and 905 areas.
New condo sales in Scarborough, Etobicoke and North York doubled with 2,093 sales, and in the 905 area, sales spiked by 150% with 5,127 units sold. Clearly, more condo buyers are starting to look to areas outside of downtown Toronto for relatively more affordable condo units.