The number of starts reached a record high last year, with 24,388 units spread over 104 projects, according to the Q4 2012 market overview released by Urbanation Thursday. Other records set by the Toronto CMA condo market include 355 active developments, just under 90,000 active units and 56,866 total units under construction.
If the market conditions were spooking investors, the statistics certainly don’t show it. In Q4, sales of condos were up 16 per cent from Q3. The number of new units sold last year totaled 17,997, down just slightly from the 2011 pace.
Ben Myers, Urbanation executive VP, says the market performed well even in spite of hyperbolic fear of a correction.
“Despite concerns over the level of unsold supply in the new condominium market, the ratio of sold to unsold units has consistently been above the long-run average in recent years” he said. “There remains confusion over unsold supply and standing inventory.”
Myers notes that the number of investors switching to a buy-and-hold strategy suggests the market will level out, not crash.
“Many investors chose to hold and rent their units in 2012 rather than sell them into uncertain market conditions” he says. “This is contrary to the theory that condominium unit holders will panic and sell their suites at significant discounts during a softening market.”
Building excess inventory was a constant cause of concern, with Mark Carney leading the charge citing the city’s condo market a cause for “concern.”
But it would seem investors and developers failed to share his sentiment. In an Urbanation survey completed in December of last year, just 11 per cent of the developers, lenders and brokers polled agreed that oversupply in the market was their top concern for 2013. In fact, sales are expected to continue at a healthy pace this year, with the research firm forecasting 14,500 resale transactions and 17,000 new condominium sales throughout the Toronto area.
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