According to the latest data from Zonda Urban, the Greater Toronto Hamilton Area (GTHA) multi-family market is preparing to bottom out.
Zonda Urban released its Q1-2024 results on Monday. The GTHA posted another double-digit annual decline in sales activity during the first quarter of this year. GTHA sales volume fell 12 per cent from a year ago to 2,321, marking a multi-year low for the market.
These numbers stand in stark contrast to other metros such as Calgary and Vancouver. Calgary’s annual sales grew by four per cent and achieved its second-highest first quarter on record. Zonda Urban is attributing these numbers to increased population growth in the area, as potential homeowners from provinces such as Ontario are seeking more affordable housing options in the west. Meanwhile, Vancouver experienced an impressive annual sales growth of 27 per cent.
“The market could be near a floor”
“The sentiment in the development industry is asking if the market hit a bottom”, said Pauline Lierman, Zonda Urban’s vice president, market research. “Investor buyers are on the sidelines, projects are either being reworked with new zoning submissions or being prepped for marketing but remain on-hold, while everyone awaits a return of confidence that hedges on interest rates and economic trends.”
“Early indications are the market could be near a floor — annual sales have continued to decline albeit at a slower pace than the 50 to 60 per cent year-over-year declines observed during 2023 and record unsold inventory levels of condominium apartments have begun to edge down. Moreover, a year of the industry recalibrating towards relatively affordable projects and extensive incentive packages resulted in the average blended price for sold new condominium apartments declining from the last quarter for the first time since Zonda Urban began tracking in the GTHA, to $1,136 per square foot.”
Condominium apartment sales in the GTHA experienced a massive decline, dropping 23 per cent year-over-year to 1,626. Weak market conditions created additional hesitancy in the industry, with developers launching only three new condominium apartment projects during the first quarter. That’s the lowest amount since the 2008 recession and down from 30 new openings at market peak in Q1-2022.
A bright spot in the GTHA market continued to be townhouses, with sales consistently rising year-over-year since hitting lows in 2022. 695 townhouses sold during Q1-2024, representing a 34 per cent annual increase. Twelve new townhouse projects opened in the first quarter selling 60 per cent of the 478 units released with an average selling price of $1,041,000 (1,645 square foot average unit size).
