Condo developers in Toronto are under extreme pressure to deliver more units as demand continues to escalate.
An assessment of the market from Urbanation reveals that 35,074 new condos were sold across the GTA in 2017, rising sharply from the 26,893 sold in 2016.
Absorption hit record highs (84% of units launched were sold by year-end) and demand from investors escalated even as prices jumped 33% year-over-year to $876 per sq ft in Q4.
Unsold inventory was down to below 8,000 – it hasn’t been that low since 1999 – but completions dropped to a five-year low of 13,513 units in 2017, with only 62% of units that were scheduled for delivery last year reaching occupancy.
“While the results for 2017 prove how remarkably strong demand can be for GTA condos, the level of activity underway is putting the industry under tremendous pressure to push the units through the development cycle”, said Shaun Hildebrand, Urbanation’s Senior Vice President. “A more sustainable pace of roughly 26,000 sales is likely in store for 2018.”
Urbanation’s calculations show that speculation dropped in 2017 from 4% of units bought and sold within 12 months in 2016, to 2.9% by the end of 2017.