Tag: new home market

• Price of a new condominium in Toronto increased 12.5% over the last year

  

  This morning BILD and Altus Group released their January 2019 new home sales figures for the Greater Toronto Area.

  Here are the highlights:

  • 1,362 new homes sold in January 2019 across the GTA. This is up 14% compared to last January.
  • Of these, 942 (~69%) were condominiums (includes low, mid, and high-rise, as well as townhouses). And 420 (~31%) were single-family homes (includes detached, semi-detached, and freehold townhouses).
  • Condominium sales volume is sitting only about 5% below the 10-year average and the benchmark price increased this month to $803,638, which represents a 12.5% year-over-year increase.
  • On the other hand, single-family home sales are down about 53% from the 10-year average and the benchmark price decreased by about 8.1% compared to last year. It is sitting at $1,130,046.

  While there continues to be a bifurcation in the new home market, we are seeing improvements across the board and the data is consistent with Altus’ prediction that 2019 will see an increase in overall sales.

  It is also important to consider how geography might factor into the above numbers. Here are the January sales numbers for the last three years broken down by region within the GTA:

  

  Just under 80% of the new condominiums sold last month took place in Toronto, whereas only about 1.2% of the single-family homes sold last month took place in the city. You can count them on one hand. There were only 5.

  So rather than just look at this in terms of housing type, I think the other way to interpret the data is that it could suggest strong and continued demand for centrally located and transit-oriented communities.

  And that just so happens to translate into a condominium.

  Photo by Eugene Aikimov on Unsplash

  2019.02.26

• Only 2 new single-family homes sold in Toronto last month

  Altus Group just released its January (2018) sales figures for the new home market in the Greater Toronto Area.

  – 1,251 new homes sold last month. 886 of these (or 70.8%) were condominium apartments (everything from stacked townhouses to high-rises).

  – This is down from 2,429 homes in 2017 and 2,118 homes in 2016.

  – Almost half of the new home sales (609 homes) came from Toronto alone. And almost all of these (607 homes) were condominium apartments. Only 2 new single-family homes sold in the city last month.

  – Benchmark price for single-family homes was $1,229,454, which is a 19.6% increase from January 2017.

  – Benchmark price for condominium apartments was $714,430, which is a 40.8% increase from January 2017.

  That last increase really stands out. I did a double take.

  But as we’ve talked about before, low supply and high prices seem to be pushing more buyers toward condos – and larger ones at that.

  Recently we’ve been seeing an increase in both average unit sizes and prices per square foot.

  According to Altus, sales of new single-family homes in the GTA last month were the lowest for a January since before 2000.

  2018.02.23

• The year of the condo

  Over the past 5 years or so, real estate headlines in the Greater Toronto Area have often focused on the rapid appreciation of low-rise housing. High-rise housing simply wasn’t appreciating at the same rate – at least in aggregate terms.

  But 2017 has brought a different story. 

  If you look at BILD’s “New Homes Monthly Market Report” (data provided by Altus Group as of July 2017), you can see that high-rise pricing is now on a similar trajectory to low-rise pricing.

  Here is that graph:

  

  This sharp uptick in pricing is also apparent when you look at the average price per square foot of new high-rise inventory. As of July, it was $764 psf across the GTA. See below.

  At the same time, average unit sizes have also jumped up to 871 square feet. So not only are new high-rise homes becoming more expensive on a normalized basis, they are also getting bigger, which further increases prices.

  

  I recognize that we’re only seeing data up to the end of July, but, from the looks of it, 2017 is shaping up to be an extraordinary year for the condo.

  Of course, part of the reason this is happening is because remaining inventory for both low-rise and high-rise product is hitting 10-year lows. We’re back to the topic of supply.

  If you’re curious how some of these numbers have changed from the month prior (June 2017), check out this post.

  2017.08.25

• Why multi-family developers are shifting their customer focus

  One aspect of the Toronto housing market that I’ve been paying close attention to is the adoption of multi-family dwellings by both long-term end-users and families. 

  I’ve written about this before (here and here, over a year ago) and have argued that here in Toronto we are at an inflection point. Multi-family dwellings – both rental and condo – are evolving to now target these new customer segments. Whereas previously, the new construction multi-family housing market was heavily geared towards investors and first-buyers. And often it was simply a stepping stone towards a single family home.

  Now, every city and real estate market is different. And I have heard many people in U.S. cities say that Millennials are simply deferring what we saw with previous generations. At the end of the day they (or we, I’m a Millennial) are going to move to the suburbs and buy that car. The current trends we are seeing around city living and reduced driving are just that – short-term current trends.

  But I think it’s worth reiterating: I do not believe that the status quo is what’s happening right now in Toronto. And I’m sure it’s also happening elsewhere. Time and time again I speak to developers in this city who are starting to shift at least some, and in some cases all, of their focus towards end-users, families, and larger units – particularly for new mid-rise product in the “neighborhoods.”

  And if you think about it, this makes perfect sense. 

  The average price of a detached single family house in Toronto is well north of a million dollars. So when a developer brings to market a 1,200 sf family sized apartment at $600 psf ($720,000) or even at $700 psf ($840,000), that home now becomes a relatively “affordable” option in many desirable areas of the city. Particularly if you value location amenities and your time (i.e. shorter commutes) over raw quantity of space. I know I certainly do.

  I know this isn’t going to appeal to everyone. But there is a big market here. Get ready.

  What are you seeing in your city? Let us know in the comment section below.

  2015.12.15

• What a “buy now” button will mean for the new construction real estate industry

  

  https://500px.com/embed.js

  Recently it has been in the news that BuzzBuzzHome.com – the new construction real estate site – will be launching a “buy now” feature in the new year (2016).

  This will allow people to buy condos and homes online with their credit card, which means that people will be able to pay the $5,000 deposit online and process all the paperwork that today happens within a sales office.

  This is huge.

  If you’re somebody who has used a computer and the internet before, the process today feels archaic. Typically you go online to register for a project and then somebody will call you to arrange an appointment. If you ask them to email you the price sheet and floor plans ahead of time, they’ll almost always tell you that they can’t do that and that you’ll need to come into the sales office for an appointment. 

  But what about if you end not liking the floor plans and you’re about to waste a few hours of your time? Too bad. The sales funnel requires you to be present in person. This is nothing against the many talented sales professionals working in new construction; it’s just that if I can design and price out a car online and if Mark Cuban can buy a $40 million jet online, then I should be able to shop for a new condo online.

  BuzzBuzzHome has been chipping away at the current model for years and they’ve managed to get a lot more information online than was previously available. When Matthew and Cliff first launched BuzzBuzzHome in the late 2000s it was almost unheard of for developers to put any sort of pricing and floor plans online. Now they at least have some of that on their site. I’m glad they stuck with it.

  Because what’s equally exciting about what BuzzBuzzHome is doing is that in order to offer a “buy now” feature, they also need to have an accurate account of all developer inventory on hand. And so alongside this “buy now” feature they’re also building out a full cloud-based inventory management system for developers. 

  This means that BuzzBuzzHome will soon be managing the supply-side of the new construction marketplace. Think of the data and analytics you can extract from a platform like this. It’s going to bring much greater transparency to this industry.

  But if your business is in any way connected to the new construction real estate market, I would take this morning and think about how the above innovations could impact your business model. I can think of a few winners and losers.

  Some of you might be thinking that people aren’t going to make the biggest purchase of their life online. But I would bet the farm that many people will. I know I would.

  2015.11.12