As one of the most lucrative housing segments, new condo prices in the GTA have risen 54% since 2015 alone. But when it boils down to Q3-2019, the market followed a strong Q2. The third quarter of the year saw the average price for a pre-construction condo in the Greater Toronto Area increase by 10.2% year-over-year. Not to mention, the market stabilized during Q3 at 4,703 units, which is up from a year ago by 1%. That's a year to date push of 21% to 16,873 units.
Here's Why Q3 - 2019 Was So Strong:
Price growth in the GTA and Hamilton show no signs of slowing. This quarter saw further upward pressure on new condominium prices, with the index value for available units rising 6% year-over-year in Q3 to $1,036 PSF. Price growth is being attributed to tightening market conditions with sales up and listings down relative to last year.
As the economy in the Greater Toronto area continues to be attractive, people from all over the world continue to come here for work. Homeownership is important to many Canadians, and condos are a relatively affordable housing option. Condos offer buyers the opportunity of achieving their dreams of owning property as a place to live or as an income property for investors.
We've noticed significant momentum in pre-construction sales now that buyers have adjusted to the province's stricter mortgage rules, rates and speculation taxes.
Thanks to the release of stats from Urbanation's Q3 - 2019 New Condo Market Report, we've gathered some useful facts about the third quarter of the year, so you don't have to!
Check out the numbers below.
New condominium sales in the GTA stabilized during Q3 at 4,703 units sold edging up by 1% from a year ago. Year-to-date sales went up by 21%, and among the units launched for pre-sale in Q3, 63% were sold, which shows consistency with Q2's new launch absorption. As the trend of rising sales kept the momentum, unsold units decreased since the last quarter.
The continued momentum in the pre-sale market helped the number of units under construction in the GTA to reach a record 71,957 units in Q3-2019. After a strong first half of 2019, completions fell back to 3,038 units in the third quarter, surpassed by 4,228 starts. Construction delays are expected to move a notable number of units that had been anticipated to complete by the end of the year into early 2020.
New condo sales occurred in projects with average prices between $700 and $999 PSF, nearly half of resales occurred in buildings with average prices under $700 PSF. Over the last three years, the gap between condominium prices and other housing types has narrowed to $312,472 — still sizeable and supportive of continued strength in condominium demand, but down 26% from its peak in 2016 ($425,050).
After an extraordinary number of launches in Q2-2019, new launch activity saw its slowest Q3 period in four years with just 11 new openings. According to Urbanation, the Hamilton - Grimsby market saw no new openings in the third quarter at all. However, of the new projects that did launch, absorption in the 905 region was much stronger in comparison to the 416 area. Eight new launches in the 416 area were 57% sold out at the end of the quarter compared to three new launches in the 905 region with an absorption rate of 73%.
Q4-2019 is predicted to see 34 projects with a combined 8,942 units launch. This projection is on relatively on-trend from a year ago (Q4-2018: 31 projects, 8,987 units). Urbanation is currently tracking 414,451 units of future condominium supply in the Greater Toronto Area. This will mark Q1-2020 the first quarter that exceeds 400,000 units.
The resale market was fairly hot in Q3-2019. The 5,899 resale transactions represented a 12% increase from Q3-2018 and 20% higher than the 10-year average of 4,934 resales. Urbanation tracked 1,916 resale condominium buildings and 354,075 units in the Greater Toronto Area this quarter. Three projects with a total of 248 units registered in Hamilton Grimsby market, bringing the total market tracked by Urbanation to 91 buildings with 5,964 units.