Toronto Condo Market Sales Drops 34%
The market trends have looked promising for Toronto condos in recent years, however, it seems as though the peak has been reached and is starting to dissipate, according to the latest statistics. In September 2012, sales started to drop, indicating a 34% decline compared to August. This occurred, even though the housing sales were higher than expected. Condo prices have increased steadily and slowly over the past few months, but now new condominium apartments are showing signs of a drop.
The initial increase in Toronto’s condo market was thanks to the low interest rates along with the stable economy in Canada, which attracted many investors and developers to the area. This resulted in Toronto being number one in terms of new high-rise building development. However, the extent of continuous building was criticized by the Finance Minster, Flaherty, due to the risk of ever present consumer debt and sudden housing corrections. One of the major contributing factors to the downfall of the Toronto condo market comes as a direct result of this – tight mortgage lending rules.
In June, the value of various building permits dropped by 2.5 % and although this was better than the expected 3.6 % slide, it still had a major impact on the overall numbers which dropped drastically thanks to the poor number of non-residential construction plans. Housing permits on the other hand increased by 4.3 %. During the month of August, a large 7.9 % increase was noted for building permits, owing to a sudden rise in non-residential building permits (25.2 %), offsetting the 2.3 % residential permit decrease.
This summer also saw the single and multiple family unit markets rising steadily with a growth of 4.2 % in July, with the leading province being Ontario. Overall the Canadian housing market has grown continually this year, however the slowed rate of growth indicates that the market may be starting to cool off. Currently there are 196 condo projects in Toronto with another 52,695 units under construction. This includes the high profile Cinema Tower project by Daniels Corp, as well as Britt Condos by Lanterra Development, and U Condominiums by the Pemberton Group.