Toronto’s surging condo market should expect to hit a plateau on the first quarter of 2018, according to property market research firm Urbanation.
This is because the market activity for new condos in the region has already reached an unsustainable pace, the think-tank’s third-quarter report stated.
“At current prices, demand will begin to moderate. Higher levels of inventory will emerge and that will help settle the market activity down,” Urbanation senior vice-president Shaun Hildebrand said, as quoted by the Toronto Star
. “We’re seeing signals from the re-sale market that prices have already started to flatten out.”
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However, this evening out is expected to take place after the average downtown price per square foot exceeds the $1,000 threshold for pre-construction units, Hildebrand stated.
For unsold condos, this has already reached an average of $991 per square foot. The average selling price for units in new Toronto projects launched in Q3 was $951 per square foot.
“I don’t think it will be long before it averages $1,000 per sq. ft. A couple of projects that have opened in the fourth quarter have prices well above that level,” Hilderbrand explained.
On the pre-construction market side, the foreign buyers’ tax implemented by Ontario in April hasn’t had much of an effect yet despite a slight slowdown in resale activity. Figures from another Urbanation study has shown that only around 5% of new condo purchases in Toronto involved overseas nationals.
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