Thanks to Stephen Dupuis, President and CEO of BILD (Building Industry and Land Development Association), for the below article.
Ten thousand of anything is a lot. When you’re talking about condos, it’s a lot of homebuyers showing a remarkable interest in Toronto’s high-rise housing market. According to RealNet Canada Inc., there were 1,764 new condos sold in the GTA in June, bringing the January-June total to a whopping 10,030 units.
With the first half of 2010 in the books, the new home market has risen 69 per cent compared with the first half of 2009, and the driving force has been sales of high-rise condo suites, which are up by a dramatic 142 per cent year/year.
I will be the first to admit that comparisons with the first half of 2009 are skewed so I looked back to the first half of 2008, well before the crisis. By this point of the year in 2008, homebuyers had snapped up 7,748 condos. We thought that was a really hot market so to be running 22 per cent ahead in 2010 is simply stunning.
The fact that six out of every ten new homes sold in June were high-rise condo suites reveals the extent to which homebuyers have embraced the high-rise lifestyle in the GTA. Through the first six months of the year the split has been 53/47 in favour of high-rise condos. Normally, the split is more like 50/50.
As for prices, the high-rise price index has jumped 9.6 per cent, from $388,881 last June to $426,252 this June.
As it happens, at least three quarters of all the condos currently being sold are in the City of Toronto, with Markham and Mississauga accounting for a large part of the remainder. While Toronto will continue to command a sizeable share of the overall condo market, there is going to be much more condo construction in all of the 905 regions going forward as the suburban municipalities achieve conformity with the Greater Golden Horseshoe Growth Plan. This is good news from both an sustainability and an affordability perspective.
It’s absolutely amazing to note that Greater Toronto has quietly become the largest condo market in North America, by far. The good folks at RealNet recently charted the top 25 “multi-family” markets in North America for 2009. At roughly 16,000 units, the GTA was tops, followed by Montreal, New York, Vancouver and Houston in the top five. Ottawa and Quebec City snuck into the top ten ahead of U.S. cities such as Los Angeles, Las Vegas, Chicago, Boston and Denver.
As an aside, another RealNet chart placed the GTA second only to Houston in total new home permits for 2009. Given the break-neck pace of condo sales set through the first six months of 2010, and a spate of new project openings planned for the Fall, I have no doubt that Toronto will remain the condo Capital of North America.
Combined with a very healthy, albeit supply-constrained low-rise housing sector, I would fully expect to see our local market end the year as the hottest real estate market in North America.
As the 19,601 new homes and condos sold in the GTA from January to June of this year turn into housing starts, they will spin off hundreds of millions in investment and tens of thousands of person-years of employment for the skilled tradespersons, product suppliers and design and other professionals who together make up the residential construction industry in the GTA.