20 Hard Facts on Toronto’s Condo Market

Record Breaking First Half

• 20,000+ new condos sold in 2010, second highest ever (first happened in 2007)
• Near record sales in Q1 2011, ~300 fewer than the highest Q1 ever which happened last year
• Q2 2011 projecting as many as 40 new project launches which is a record. Q2 2008 had 38 project launches
• At the end of Q1 2011, of over 75,000 units only 17% were unsold, which is tied for the lowest ever matched only in Q1 2010 and Q1 1986
• In Q1 2011, 4,000 units were launched and in Q2 2011, another 9,000 units were. It is expected that over 20,000 units will be sold by the end of the year 2011.
• In terms of registered projects we will have about 16,000-17,000 units registered strengthening the re-sale market
• Toronto CMA has averaged 100,000 new residence over the past 10 years leading to higher demand in the market

Investor Behaviour

• 50%-60% of the units are purchased by investors up from 35% from five years ago
• Some of the reasons why so many investors are attracted to the market include the fact that condo prices have gone up 7%-9% year over year over the past five years, strong Canadian Dollar, and relative political stability in the country
• Canada has what the world is looking for: Food, Fuel, Fertilizer and Forestry. According to REIN, that’s the main reason why investors are attracted to Canada
• As many as 25% of investors look to assign their units. This translates into approximately 3,000 units of 20,000 total units sold in 2010
• Investors are from all backgrounds including: Honk Kong, Mainland China, East Indian, Persian
• Investors at times buy real estate properties including new condominiums not to necessary rent out (for cash flow) but to simply hold their money. For example, instead of buying gold, they choose to buy Real Estate. This will lead to increase in vacant units

Buyer Behaviour

• Factors such as price of land, and bigger players simply holding onto lands has driven some first time home buyers into high rise market.
• Scarborough city centre projects have great value even though they have negligible capital appreciation. Considering the price paid and the amount units are being rented for the area gives great value
• In Toronto, unlike US cities, water view is not all that important when it comes to the rental market (Rents on harbourfont are at $2.30/sqft right now). We think it might have something to do with Toronto’s cold weather! Torontonians care most about living in prestigious neighbourhoods, access to high end shopping, and access to transit
• Most popular suite types are: 1 bedroom , 1 bedroom+den, 2 bedrooms at about 27%-28%. Studios are not as popular, neither are 2 bedroom + Den apartments; the latter is due to high price of rent.  3 bedroom-plus units are not being built as much as they take longer to sell and builders cannot afford to be patient

Rental Figures

• 700 one bedroom units were rented in Q1 2011, 3/4th of units were rented with parking space
• Areas that command highest rates in Toronto: 1- Bloor/Yorkville with $3.03/sqft  2- downtown core with $2.50/sqft
• Rent/sqft in Toronto CMA is about $2.11/sqft overall;  rent/sqft for projects that have been registered since 2007 is $2.26/sqft

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