Photo: James Bombales
With more than 100 cranes towering above Toronto’s downtown core alone, condo construction hit an all-time high in the GTA in the first quarter of this year.
There were 71,378 condo units under construction across 242 projects as of 2019’s first quarter, according to new analysis from Urbanation, whose team of researchers tracks developments in the condo market.
During the same time last year, contractors were working on 221 projects encompassing a total of 61,555 new homes.
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The rapid rate of condo building in GTA has led to soaring construction costs, Urbanation suggests. In light of this, developers are exercising caution, as construction costs have been cited as the main reason for a recent wave of condo cancellations.
Last year, 17 condo projects were cancelled, resulting in a loss of 4,672 units, up from the 1,678 that were nixxed in 2017. The year before that, just 379 units were axed.
A limited number of launches — developers brought just eight projects to market last quarter — put a lid on new condo sales. Some 3,073 new units sold in the first quarter throughout the GTA, sinking 26 percent to the lowest level since 2013.
Urbanation President Shaun Hildebrand expects the market will pick up this quarter. “A particularly slow period for new condo sales activity in early 2019 will give way to a busier second quarter as project launches increase and demand fundamentals in the GTA remain solid,” he says in a statement.
“However, it’s also important to recognize that the growth trajectory for condo prices is starting to change and slower rates of appreciation are emerging relative to the past few years,” Hildebrand adds.
Among all projects that were being marketed in the first quarter, the average selling price was $779 per square foot, compared to $766 in the preceding quarter, as per Urbanation’s index. That’s a quarterly increase of 1.7 percent, short of the 2.9 percent average quarter-over-quarter gains averaged in the past two years.
Still, per square foot pricing was up 10 percent from a year before as the supply of unsold units in development is historically low.
At the first quarter’s end, there were 12,232 unsold units available in projects currently under construction.
“While rising from a 15-year low of 8,803 unsold units in Q1-2018, available supply in the new condominium market stayed well below the 10-year average of 15,003 units and the high of 20,689 unsold units in Q1-2013,” reads the Urbanation report.