After several years of sustained robustness, Toronto’s condo market will almost certainly slow down next year, according to the city’s major developers.
“I can’t, for a minute, imagine that we’re going to continue to see the increases that we’ve experienced,” Tridel executive VP of sales and marketing Jim Ritchie told Bloomberg. “Do I think there’s still room for growth? Yes, but not what we’ve seen in the past three years.”
“We have hit the peak and I think prices will probably stay flat, for, I would even say the next two years,” Diamond Kilmer Developments VP of marketing and sales Jane Renwick agreed.
This, after the city’s condo prices grew by 50% over the past three years to reach a historic high of $570,764 in September, data from Urbanation indicated.
Increasing costs are also making themselves felt in construction material, which might add further downward pressure on the market. Urbanation noted that 15 units representing more than 4,500 units have been cancelled this year alone.
“We’ve seen cost inflation in the construction space being in the range of 10% this past year, which is something we hadn’t seen previously,” CentreCourt president Shamez Virani said.
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“The theme of 2019 is about protecting your margin, about ensuring that you’re really being thoughtful about the timing and the allocation of costs, and selling and building in the same market environment so you don’t get caught in that situation where you’re forced to cancel a project,” Virani added.
On the other hand, Menkes Developments executive VP of high-rise residential Jared Menkes is among those who maintain that prices will continue increasing in the longer term, in no small part due to the city’s growth projections along with supply scarcity.
“There’s a lot of red tape that’s slowing down bringing more product to market,” Menkes explained. “I promise you, pricing is going up.”