2007 TORONTO CMA CONDO MARKET NUMBERS SHATTERED RECORDS
2008 Outlook sees continuing growth, despite affordability concerns
TORONTO, March 4 /CNW/ - In the first two months of 2008, the Toronto
condominium market has seen nine new high rise condominium openings, compared
with five during the same period last year, according to Urbanation.
"In fact", said Urbanation's Editor and Executive Vice President Jane
Renwick, "we are forecasting 19,000 sales in the new condo market and 17,000
sales in the resale condo market for 2008."
These CMA results and projections include:
- 2007 was a record-breaking year for the Toronto condo market:
- Annual unit sales increased by 40 per cent (22,654 new unit
sales in 2007 vs. 16,114 in 2006 and 16,224 in 2005)
- 104 new condo projects opened in 2007 vs. 84 open in 2005, the
- 2007 Toronto condo prices rose 11.3 per cent in the new sale market
and 15.1 per cent in the resale market, over 2006 prices:
- The double-digit price increase in the new sale market was
partly driven by growth in Toronto's luxury and 'super luxury'
condo segment (defined as projects that trade over $600 per
square foot - psf) which represented 3,784 new units in 2007
and averaged $844 psf.
- 'Non luxury' units in the new sale market, by contrast, in the
CMA averaged $360 psf, once the luxury units were factored out.
- Price increases in the resale market were even more substantial
rising 15.1 per cent, from $278 psf in 2006 to $320 psf in
Balancing the 2007 price increases, condo mortgages remained affordable,
as interest rates persisted at historically low levels. Amortization periods
also extended to 40 years, generating lower monthly payments, or allowing for
the purchaser of a more expensive unit at the same monthly carrying cost of a
mortgage based on a 25 year amortization. Furthermore, the definition of a
conventional mortgage changed in 2007 from 25 to 20 per cent down, reducing
mortgage insurance requirements at the same time. Unlike the US subprime
market, however, Canadian lenders did not relax their credit evaluation
standards, and the Canadian mortgage default rate remained at just .25 per
cent (one in 400 mortgages).
Added Renwick, "The Toronto condo market remains buoyant because of low
unemployment, low interest rates, high population growth and positive
demographic changes that favour condominium living."
"To answer the fundamental question, 'Can the Toronto CMA continue to
absorb high levels of new supply, especially in light of the considerable
number of units that will be added to the resale universe in 2008'...the
answer is, Urbanation expects the general sales momentum of recent years to
hold through 2008, although the sales performance of 2007 will be difficult to
duplicate," she said.
Urbanation is Canada's leading condominium market research firm. Since
1981, the firm has been analysing the Toronto condominium market, publishing
the "industry bible" - Urbanation's Condominium Market Survey. This quarterly
report tracks new, resale and future condominium projects. Urbanation also
provides the development community with essential consulting services, which
include site specific market studies, surveys and focus groups.
For further information:
For further information: David Eisenstadt, Beth Merrick, The
Communications Group Inc., (416) 696-9900 ext. 36 or ext. 40,