According to exclusive data from Zonda Urban, townhome projects continue to be the hot product in the Greater Toronto and Hamilton Area (GTHA). Overall, multi-family sales at an annualized pace of 15,971 are down 44 per cent from last year.
Zonda Urban delivered its Q3 GTHA multi-family market survey results on Tuesday, and a stark contrast was evident as buyers showed a particular demand for certain types of homes. The sale of new townhouse units rose a whopping 426 per cent to 894, marking two consecutive quarters of annual growth in demand for at-grade units.
There were 19 new projects and phases launched during Q3. Of these 626 units, 62 per cent were sold, accounting for 70 per cent of all townhouse sales. Demand for townhomes was seen in north Oshawa, Pickering, and Oakville—the average new townhouse sold for $1.167 million, or $652 per square foot, during this quarter.
Meanwhile, condominium apartment sales declined 23 per cent year-over-over to 1,886 units. Eight condominium apartment projects began sales during Q3-2023, representing 2,396 units. Thirty-eight per cent of those apartments were sold. Total sales from new openings in the third quarter declined 49 per cent year-over-year.
“The renewed enthusiasm that emerged in the early spring for condominium apartments largely dissipated by the summer months”, said Pauline Lierman, Zonda Urban’s vice president, market research. “With late spring launches seeing at best tepid demand, expectations are being refocused towards a longer absorption period by the industry.”
“This includes having a fresh look at incentives—are these the best offerings to attract buyers? We are seeing deposit structures reach unprecedented lengths. Pre-occupancy deposit structures have extended to an average of 701 days for fourth-quarter openings, compared to 548 days a year prior for Q3-2022 openings. Inevitably, however, marketing of projects that cannot ignite early demand will likely be put on pause, which we are already seeing amongst the fourth quarter openings.”
Meanwhile, developers still must contend with an ever-changing market during a time when the industry is preparing to deliver post-1990 levels of units reaching occupancy. Thirty-eight buildings with a projected 9,890 condominium apartment units are in the process or expected to begin occupancy by the end of the fourth quarter. This will bring 2023 completions to a 30-plus year high at around 27,000 units.
In addition, approximately 5,543 new build-to-rent apartment units will be completed in the GTHA this year, which will also be a multi-decade high.
