Condo construction in the Greater Toronto Area passed a milestone in the first quarter of 2018, surpassing 60,000 units for the first time ever.
Data from Urbanation shows that condo apartment construction reached 61,337 units with an additional 37,389 in pre-construction marketing (89% pre-sold).
Sales meanwhile, slipped back from their 2017 record high of 9,744 for Q1 (37,000 full year) to 4,219 units, more in line with the 10-year average.
Sales activity, which was weighed down by fewer new launches, was down 38% in Q1 2018 to 4,029 units.
“Moderation for new condo presales was in order after a breakneck pace in 2017”, said Shaun Hildebrand, Urbanation’s Senior Vice President. “Industry capacity issues should keep pre-sale activity in check this year, but with inventory levels exceptionally low, prices continue to remain propped up” added Hildebrand.
Unsold inventory was at a 16-year low of less than 8,000 units meaning upward price pressure to $914 per square foot, a 29% year-over-year increase.
The new condo market became aligned with resale condo activity during Q1, which declined 31% year-over-year to 4,297 units following new mortgage stress test requirements for uninsured borrowers introduced at the beginning of the year.
Prices for resales were up 2% quarter-over-quarter and 11% year-over-year to $619psf.
Average condo prices reached $558,000 with buyers paying an extra $42K in the City of Toronto. Demand for studio units increased prices by 24% year-over-year to $381,000.