Your barber knows best: GTA condo market softening

by Vernon Clement Jones07 May 2012

While the new condominium market in the greater Toronto area saw 6,070 sales in Q1-2012, the highest of any first quarter on record, the average of 18.0 sales per project was lower than the 18.3 logged for the same three months in 2011, according to a new report from Urbanation, market research firm focused on condos.

"Despite the record sales in Q1-2012, Toronto (census metropolitan area) brokers and developers still report anxiety about the future health of the condo market," says Urbanation Editor Ben Myers. "The probability of a market crash or major price correction is very small, but the prevalence of media coverage for this outcome remains high."

More certain has been the continuing growth in developments across the region, with 338 active projects and 84,698 active units recorded in the first quarter as record highs.

Despite that, the average square foot of sold condo space stood at $519, or 2% higher than the previous three months and 8% higher than a year earlier.

Urbanation estimates that the average price in the new market is $393,000 with an average size of 757 sf.

Still, the resale market was weaker, prices per square foot about 1% from the previous quarter and 3.8 per cent, year over year.

That may only be the first sign of more slowing to come, with as many as 40 new project launches with more than 11,000 new units expected in the second quarter.

"With the market being much larger now, the question is: Is this higher level of unsold inventory the new reality?" said Myers. "Or is it a sign that the market has reached its peak? We'll have to see."

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