The number of townhouses sold in the Greater Toronto and Hamilton Area fell by 84% in the third quarter, according to data compiled by Zonda Urban. The entire multi-family sector slowed with 2,891 units sold – a 61% drop from a year ago.
“Rapidly rising interest rates are having an impact, along with strategic pull-back by developers,” said Pauline Lierman, Zonda Urban’s vice president market research (ON/QC). “The market has slowed, but there is a lot of testing of the waters ongoing.”
Launch activity for new condos was nearly halved compared to the same quarter last year. Fourteen projects were launched, bringing 4,391 new units to the market – 40 percent of which sold.
“The development industry’s cautions approach as the market moved into the summer months came to bore in sales volumes for the quarter,” Lierman said. “While Q3 often provides a breather between the busy spring and fall seasons, the summer drop in volume was sharp.”
With the introduction of Ontario’s More Homes Built Faster Act that was released last week, construction capacity in the GTHA is at the forefront of conversations about Ontario’s low supply of multi-family housing.
There were 6,920 new multi-family units available at the end of 2022’s third quarter – 5,702 were condominium apartments and 1,218 were townhouses.
The average blended index price in the GTHA for apartments in the third quarter was $1,105 per square foot and $706 PSF for townhouses. Townhouse index prices remailed relatively stable compared to last quarter, and apartment index prices increased by 1.3 percent.
Index prices for newly launched condos saw an uptick to $1,520 PSF in the third quarter as several marquee upper-market projects opened in downtown and midtown Toronto.
The news wasn’t all bleak – a record 11,278 apartment units started construction in the quarter, breaking the previous record of 9,086 units seen in the second quarter of this year.
Since April, 20,364 units have begun construction.