There was a record high for new condo starts in the GTA in the second quarter of 2018 (7,981) while sales slumped.
There was also a record high for condos under construction (63,905, 95% pre-sold) driven by a high level of pre-sales in 2017.
However, a report from Urbanation says that pre-sales of new condos in Q2 2018 was down 57% year-over-year to 4,977 units with a slower pace of new projects and absorptions moderating to their longer-term average.
Of the 5,759 units brought to market in pre-construction projects in Q2-2018, 56% were pre-sold by quarter end, which compares to an 80% opening absorption of the record 9,521 units launched in Q2-2017.
No surprise after 2017 high
The slowdown in sales is no surprise following the record breaking high of 2017.
First half 2018 sales of 9,058 units were down 58% from 2017 (21,316) and 13% below the 10-year first half average of 10,471 sales.
“Fewer new pre-construction condo sales this year will help to keep the supply pipeline in check as construction starts and completions move to new highs over the next couple years”, said Shaun Hildebrand, President of Urbanation. “Ultimately, low unsold inventory and a stabilizing resale market will provide support for the new condo market in the second half of 2018.”
- The average opening price for new launches in Q2-2018 was $835 psf, up 18% year-over-year but down from the high of $954 psf for units launched in Q4-2017.
- Unsold inventory in development moved up to 9,341 units — the highest level in six quarters but well below the 10-year average of 15,807 units
- Condominium apartment resale volume was down 17% annually in Q2, marking an improvement over the 31% drop recorded in the previous quarter. Second quarter resales of 6,019 units remained 5% higher than the 10-year Q2 average (5,708)
- Annual resale price growth of 5% in Q2-2018 represented a strong deceleration from the 30% annual growth recorded a year ago in Q2-2017. Continued positive resale price growth has been supported by low levels of supply, as total listings have declined year-over-year for 10 consecutive quarters