Here's some unsurprising but important news via Urbanation:
New condominium apartment sales last year totalled 4,590 homes. This is a 78% decline compared to the latest 10-year average of 20,835 homes, and the slowest year for new condo sales in the Greater Toronto and Hamilton Area (GHTA) since 1996. See above chart.
Only 802 new condominium apartments were sold in Q4-2024.
Six projects launched in Q4-2024, totalling 1,829 homes, of which only 10% were sold. A total of 1,506 new condominium apartments started construction during this same quarter.
A total of 29,800 condominium homes were completed in 2024 -- a record. This year, 30,793 homes are expected to complete, which if it happens, will create another new record.
In total, 78,742 new condominium homes are currently under construction across the GTHA, as of Q4-2024.
This may seem like a lot. But 30k of these homes are expected to complete and occupy this year. That leaves around 48k under construction, plus whatever new starts end up happening in 2025. So as Shaun Hildebrand points out in the above release, at some point around 2026-2027, we are going to see a dramatic fall off in completions and new housing supply.
Even if starts magically ramped up this year (which would be unexpected), there would still be a period of relatively low completions that would need to work its way through the system. Development is, by nature, excruciatingly slow to respond to changes in demand. There's always a lag. So overall housing supply is something we're paying close attention to right now as we execute on our real estate strategies.
Chart via Urbanation
“If everyone is going left, look right." -Sam Zell
The right time to buy things is usually when other's aren't, which is why I've felt that this year was a great time to buy a centrally located condo. Cities aren't going anywhere. This isn't their first pandemic. Downtown demand will return as soon as urban life returns and the majority of people are back in their offices next year.
I've also been predicting that the run-up in single-family home prices that we have seen this past year here in Toronto will eventually lead to a surge in demand for condos (and perhaps even for larger suites). It's a question of relative affordability. And so it was interesting to see Shaun Hildebrand of Urbanation predicting the same thing for 2021 in this recent Toronto Star article.
Hildebrand thinks the soaring prices of single-family homes will also push more buyers back to the condo market.
Shane Dingman's recent Globe and Mail article about "the investment case for mid-rise condos" is a good summary of why this housing type has become so popular in Toronto.
Mid-rise buildings tend to attract more end-users because of their boutique scale. That is, they attract people who plan to move into the building once it is built, as opposed to buyers who plan to rent out their unit. We are certainly seeing this with purchasers at Junction House.
Because of their generally smaller scale and because they are often built in mature neighborhoods with few opportunities for new construction, supply of new mid-rise housing also tends to be limited. That bodes well for future price appreciation.
Here's a quote from Shaun Hildebrand (President of Urbanation), taken from the above Globe article. (Sorry, it's behind a paywall.)