Following the uncertainty of the 2020 housing market, 2021 was a rebound year for the Greater Toronto Area’s new construction industry, a year that saw new project launches, re-opened presentation centres and record-breaking sales numbers.
Come the new year, it’s likely we’ll continue to see the marketplace evolving as rising costs and demand enter the picture.
Glen Buttigieg, vice president of sales at TCS Marketing Systems, explained that the 2021 new construction market quickly picked up steam, leading to record prices across the GTA in the early spring.
In April, new condo sales broke a 20-year record, rising 69 per cent over the 10-year market average according to the Building Industry and Land Development Association (BILD). After the first six months of 2021, the GTA saw a total of 24,060 new homes sold, 25 per cent above the region’s 10-year average.
Once the province started to come out of lockdown, Buttigieg said that people shifted their focus from buying properties to getting out of the house. While buyer popularity returned to downtown Toronto, areas around the city continued to attract purchasers.
“There were some big launches across the city which brought the downtown market back into focus, but as expected, there was a high demand for mid-rise and towns while people looked in the suburban centres around the city,” he said.
In 2022, Buttigieg expects demand for mid-rise and boutique buildings outside the downtown core to continue. Projects such as Debut Waterfront Residences in Barrie, for example, have seen record sales numbers with sellers now able to get out and explore their options.
“With the city now bustling, I think we [will] also see larger condo launches in the downtown area, signalling a return to the ‘new normal,’” he said.
Thanks to the federal government’s heightened immigration targets to compensate for COVID-19 shortfalls, 2022 could see 411,000 new permanent residents arrive in Canada. Because of this, Buttigieg anticipates that prices will go up as the demand rises for homes. The GTA’s 905 area in particular is a very popular region for families who are seeking accessibility to jobs and school districts.
Preferences for amenities that cater to work-from-home lifestyles, provide greenspace and a sense of community are going to be the norm going forward, Buttigieg explains.
“The popular one-bedroom-plus-den is now the one-bedroom-plus-office that can also double as a play space and a relaxation space,” he said. “The popularity of townhomes has been at an all-time high, with both affordability and space separation being factors.”
High commodity prices and supply chain disruptions caused by the pandemic are expected to start stabilizing in the new year. But like almost every industry forced to deal with COVID-19 during the past two years, Buttigieg said that the development industry is starting to feel the effects of the rising costs to build.
He said that there is talk that construction costs are up 30 per cent over the past 18 months, a trend that will directly impact the costs for home purchasers in 2022. To allow for a better understanding of costs, Buttigieg explains that developers are looking to phase their projects more to ensure that they can be financed and built.
Over the past year and a half, sales teams and new construction marketing specialists were challenged in light of social gathering restrictions, virtual presentation alternatives and closed offices. While everyone is more comfortable with doing things digitally these days, Buttigieg expects that we will see more action in the sales centres next year.
As the industry is heavily built on relationships and networking, unique events that have helped to sell out projects in the past will see attendances from brokers and clients again.
“While we are still amidst some level of uncertainty of what the new normal is, I do believe we will see the large events heavily attended,” said Buttigieg. “While you may get a presentation [from] an investor or brokerage virtually, people missed interacting and 2022 will be all about bringing that back.”
