New year, new market… er, sorta.
While the rest of the world made its list of New Year’s resolutions, developers made a resolution of their own:
Figure out what’s up with balconies.
New data from Bullpen Research and Consulting shows that the average size of a balcony in a new condo project in the Greater Toronto Area (GTA) is approximately 72 square feet – 16 per cent of the average unit size. That’s a significant amount of space for a home feature that (it’s okay to admit…) often ends up turning into outdoor storage.
For those that love spending time outdoors, a balcony might be at the top of the wish list – but many developers are ready to get rid of them entirely. Balconies can be costly to build, complicate green building standards and depending on how they’re designed, they can turn out to be pretty ugly additions to an otherwise stylish structure.
But before all the fresh air enthusiasts start clutching their pearls in horror at the thought of balcony-less buildings, let’s break down why they might be next on the chopping block.
The end of 2022 saw condominium sales activity in the GTHA drop off a cliff. Interest rate hikes, lack of affordability and skyrocketing inflation threw the real estate world for a bit of a loop.
2023 is expected to be the year of the softer market. Price corrections, launch delays and changing expectations are marking the first quarter of this year, and developers may want to get rid of balconies to save costs this year. The only way to know is to wait and find out.
Whether new condominium projects in 2023 feature balconies or not, there’s still long-term demand for pre-construction projects. Bullpen forecasts 14,000 to 16,000 new condo sales in the GTA in 2023.
For the last 18 months, new condo price growth in the GTA has stayed steady at around 10-15 per cent. Expect those numbers to drop to the low single-digits by the end of the year. Bullpen predicts very few luxury and ultra-luxury launches as developers conserve spending.
Per the firm, ensuring a project’s success will hinge on the right price and a projects range of offerings and suite types.