New condo sales drop by 85% — but GTA prices hit record high
New condo sales in the GTA during the second quarter fell to their lowest levels since 2009, but prices and construction moved up, according to condo tracking market research firm Urbanation.
In terms of new condo apartment sales during the second quarter — when the province was largely shut down as it grappled with the COVID-19 pandemic — a total of 1,385 units were sold in the GTA.
Urbanation said it was the lowest level of sales activity since the first quarter in 2009 during the recession, when 885 units sold.
“New condo sales dropped 85 per cent year-over-year as only six projects and 1,176 units were launched for presale during the quarter, which compares to 40 projects and 11,415 units launched in Q2-2019,” the firm said in a news release Monday.
The second quarter is typically a busy period, said Pauline Lierman, Urbanation’s director of market research.
“When we got into Q2, COVID hit, everything from the second half of March fell to the wayside, for everybody,” she said. “The market was stagnant, nobody really knew what was going on.”
But she said there was a “silver lining,” noting that the market began to pick up again by the end of the quarter.
“Response has picked up, it picked up faster than outside the downtown area,” she said, noting some incentivization to attract buyers, such as more flexible down payment terms.
Urbanation said unit prices “in actively marketed new condo projects in development across the GTA” averaged $867 per square foot in the second quarter, which the firm said was a record high — slightly more than the $864 per square foot in the first quarter and 8 per cent more year and year.
“Developers gained confidence during the quarter as sales continued with the move to a virtual format, inventories remained low, and many projects progressed into the construction stage,” Urbanation said in its release.
The firm said 90 per cent of all new condo units in development in the GTA were pre-sold in the second quarter, compared to 88 per cent in the second quarter last year.
“New condo supply is expected to see improvement in the third quarter, as the success shown within recent new launches and the stability of the resale market during COVID-19 has pulled forward some project launches into the summer that were previously delayed to the fall,” Urbanation said.
“As of the end of July, 2,137 units launched so far during Q3.”
The firm also said that there was an increase in unit construction compared to the second quarter last year — this despite the fact that there was a government-imposed halt on construction for part of the quarter as part of efforts to limit the spread of COVID-19.
There was a total of 7,388 units that started construction, an increase of 45 per cent compared to the second quarter in 2019, Urbanation said.
“The growth in condo construction has been fuelled by the 905 Region, which saw its under construction count rise to a record high 24,690 units from 17,764 units in Q2-2019,” said Urbanation.
“Meanwhile, the number of condos under construction in the former City of Toronto (largely representing the downtown markets) declined from 39,027 units in Q2-2019 to 34,990 units in Q2-2020.”
JOIN THE CONVERSATION
What do you think of the condo market in Toronto?