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Following the unprecedented 2020 market, the new home and development sector in Toronto was just as eventful in 2021.
This year, the industry grappled with rising construction costs, building restrictions and low housing supply, but also celebrated a slew of new development applications and record-breaking sales levels in some months.
Here, we’ve outlined some of the major data points, events and reports that happened in new construction during each month of 2021.
Kicking off the start of the year, the new construction sector saw single-family home sales jump 51 per cent yearly as 1,506 units were sold in January, the highest total recorded for that month since 2006 as per the Building Industry and Land Development Association (BILD).
The surge in post-holiday COVID-19 cases, however, pushed Premier Doug Ford to enact a second state of emergency for Ontario, including restrictions on non-essential construction. Building activity on residential construction managed to avoid any significant limitations.
In January, Concord Adex unveiled one of the largest and highest suspended residences in Canada, the Grand Bridge Suite, which became the first to hit the public market.
One of Toronto’s biggest luxury developers, Cresford, saw three of its downtown condo towers fall into receivership in March 2020. Nearly a year later, The Clover on Yonge was sold to Concord Adex who rebranded the 44-storey high-rise as The Gloucester on Yonge.
The One offered a sneak peak of its 160-room hospitality component, Andaz Hotel. The Yonge and Bloor streets supertall started its journey to become the tallest residential tower in Canada after filing an application amendment in December 2020 that would boost its height from 85 storeys to 94 storeys and 338.3 metres.
By February, it was becoming apparent that buyers were rerouting their interest in downtown condos again after the market saw lower demand for this housing type throughout much of 2020. Data from BuzzBuzzHome showed that buyer inquiries for new construction condo projects in the City of Toronto during February 2021 outpaced those submitted during the same time period in 2020.
Meanwhile, a combined total of 3,240 new home units were sold in February, down 34 per cent from 2020 according to BILD.
There were further indications that Toronto’s condo market was making a comeback — in the Entertainment District, a one-bedroom condo suite sold slightly under its $1,025,000 asking price for $1,015,000.
That month, 5,003 new homes were sold according to BILD, 3,297 of which were condos. By now, 5,593 new condo units had sold during the first three months of 2021 according to Urbanation, a level that was close to the same period in 2020, signalling a return to pre-pandemic market performance.
Despite supply challenges, Ontario’s Greater Golden Horseshoe (GGH) recorded “a record high” for building permits at 39,734 residential units in Q4-2020 and Q1-2021, up 56 percent from the same time in the previous year.
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Buyers had quite the appetite for new condos in April. That month, BILD reported 3,619 new condo apartments sold, enough to break a 20-year sales record for the Greater Toronto Area.
Major development proposals were put forward to the city, including a 3,770-unit master-planned community Scarborough’s Golden Mile. New renderings were also unveiled for the 3,500-unit downtown railway park community, called the ORCA project.
One of Cresford’s three condo projects in receivership, The Residences of 33 Yorkville, was reportedly sold to Pemberton Group for an estimated $300 million price tag.
By mid-April, residential construction had avoided additional provincial restrictions as Ontario COVID-19 cases surged to their highest levels yet.
By now, concerns were swirling about rising construction costs and difficulties with the supply chain.
In its 2021 construction cost forecast for high-rise multi-family buildings in major Canadian cities, Altus Group reported that Toronto would see an estimated cost increase of five per cent in 2021, falling somewhere in the range of three to six per cent. In talks with Livabl, David Schoonjans, senior director of cost and project management at Altus Group, revised this estimate to a seven to eight percent range.
Even as Ontario extended its lockdown by three additional weeks, residential construction remained largely unaffected by COVID-19 restrictions.
As the market transitioned from late spring to early summer, available new home inventory hovered around 3.3 months of supply, desperately low compared to the nine to 12 months of inventory needed for balanced market conditions.
Hitting the six-month mark of 2021, the GTA recorded 24,060 new home sales, a level that was 25 percent above the region’s 10-year average. New product coming onto the market struggled to keep up with demand as inventory dropped again to 11,451 units in June, according to BILD.
Mattamy Homes, North America’s largest privately-owned homebuilder, launched its GTA Urban Development Division to expand its urban presence, including its mid- and high-rise offerings, in the GTA.
With Q2-2021 wrapped up, 9,001 new condominium apartment sales took place across the GTA between April 1st and June 30th, the third-highest quarterly total ever. Approximately 1,242 new purpose-built rental units were also completed and began occupancy during the quarter, the second-highest quarterly total for new supply additions in more than 30 years.
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As is typical in the summer, new home sales “took a bit of a breather,” in July, but prices roared to a record-high.
Toronto City Council’s Executive Committee approved a tax design and implementation plan to place a new one percent tax on vacant homes. In practice, the tax would encourage vacant property owners to sell or rent out their home in an effort to boost Toronto’s housing supply. The tax will come into effect on January 1st, 2022.
August marked the start of the shortest federal election campaign in Canadian history, just 36 days in length. Candidates across the politician spectrum made their case on how to fix the country’s housing crisis, which included plans to build more homes, limit foreign ownership and incentivize the creation of affordable housing.
Toronto’s iconic cube house near the Don Valley Parkway was the latest city landmark to receive new development plans, proposing to turn the site into a 35-storey mixed-use tower. The Dominion Foundry Complex was also saved from demolition thanks to an agreement reached with the city to retain them.
August sales for new condos was red hot, with BILD reporting a 35 per cent increase in transactions from a year ago. Single-family homes did not perform as well that month, down 15 per cent from the 10-year average.
With Canadian housing starts at their highest level since the 1970s, RBC’s senior economist Robert Houge reported that starts in the Toronto region grew by 1.4 per cent over the last 12 months relative to the 2015-2019 average, much less than Vancouver, Ottawa and Montreal.
However, in a separate report, the bank said that the record-high number of apartments under construction in Canada posed potential absorption risks over the medium term, including areas like Toronto where 27 per cent of units are being built.
GTA new condo sales in September shot 16 per cent above the 10-year average as available inventory between condos and single-family homes were completely opposite. On a positive note, housing starts grew 19 per cent from August in Toronto.
The supply of new single-family properties dwindled to near-historic lows in October, with just 1,138 units available for the taking. Meanwhile, the seasonally adjusted annual rates for housing starts dropped monthly by 43 per cent in Toronto.
A report by Ottawa-based research and policy think tank, Smart Prosperity Institute, found that Ontario needs to provide one million new residences within the next 10 years in order to meet demand.
In light of labour shortages and rising commodity prices, Schoonjans at Altus Group told Livabl that construction costs for high-rise Toronto residential buildings “will have increased by 10 per cent to 11 per cent by the end of 2021.”
In a landslide 23-2 vote, Toronto City Council passed its inclusionary zoning policy that will require new developments around protected major transit stations areas to include affordable rental and ownership housing units starting in 2022. The policy would secure five to 10 per cent of condominium developments — over minimum unit thresholds — as affordable housing. This threshold will gradually increase to eight to 22 per cent by 2030.
Over in the 905 region, Zonda Urban reported that the growth of newly-launched condo prices had reached up to $1,000 per square foot in some areas thanks to supply chain challenges and a strong rental market. Market insights from JLL found that the three-year change in average costs for Toronto have grown 22.2 per cent.
In the final weeks of 2021, new housing starts increased in Toronto as a result of growth in the multi-family sector.
Toronto-based Freed Hotels & Resorts closed on a jaw-dropping $330 million acquisition deal on three of Ontario’s most renowned resort properties, including Deerhurst Resort, Horseshoe Resort and the remaining development lands at Blue Mountain Resort.