Monday, November 28, 2016

GTA high-rise sales breaking records


Sales of high-rise homes in the GTA are set to break records in 2016 according to the Building Industry and Land Development Association (BILD).

So far this year there have been 20,596 new high-rise sales in the Greater Toronto Area, accounting for 60 per cent of all new home sales in the area up to the end of September. There were 14,140 low-rise sales.

Tight supply has seen prices continue to rise sharply with new homes averaging $992,231 in September, up 22 per cent from a year earlier. For low-rise, prices averaged 486,605, up 10 per cent year-over-year; new detached homes averaged $1,194,771.

"We have a serious housing supply challenge in the GTA due to a significant shortage of shovel ready land and long and uncertain project approval timelines," BILD president and CEO Bryan Tuckey said. "These factors are severely restricting the number of new homes being brought to market and are causing prices to surge month after month."

Supply of new homes dropped 10,000 in the past year.

Foreign buyers have limited power in GTA condo market as sales soar

Foreign buyers play a limited part in condo sales activity in the Greater Toronto Area but investors play a key role in the market according to a new report from Urbanation.

It found that just 5 per cent of sales that have occurred within projects currently in active development across the GTA were to foreign buyers while 52 per cent were to domestic investors.

“The results of this very important survey show a rather limited role of foreign buyers in the GTA new condo market and a very significant overall share of investors,” said Shaun Hildebrand, Urbanation’s Senior Vice President.

In projects where foreign buyers are involved, their share ranges from 1 to 25 per cent of units with domestic investors picking up between 5 and 90 per cent.

Urbanation’s figures show that there were 6,677 new condo sales in the third quarter of 2016, up 73 per cent from the same period of 2015. Total unsold inventory was down by 33 per cent to 11,485 representing 5.2 months of supply.

“The pace of new condo development has fallen well below the level of demand this year. Given the low prevailing amount of available supply and diverse range of buyers, the recent mortgage insurance rule changes are anticipated to have a somewhat limited effect on market conditions for condos in the near term,” said Hildebrand.

Rental market tightens in GTA

There was a 17.3 per cent drop in condo apartments available to rent in the Greater Toronto Area in third quarter of 2016 compared to a year earlier, Toronto Real Estate Board says.

“Demand remains very strong for condominium apartments in the Greater Toronto Area. The key issue in the third quarter was the fact that there was a pronounced decline in the number of units available for rent,” said Larry Cerqua, TREB president, adding that fewer new developments became available to investors in the quarter.

The number of signed lease agreements through the board’s system was down 4.8 per cent while rents increased sharply; a 1-bedroom apartment averaged $1,777, up 7.2 per cent; a 2-bedroom apartment averaged $2,419, up 7.9 per cent.

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