Sales of new condos almost reached a record level in Toronto

An increase in new condos built in Toronto still couldn’t absorb the sharp demand growth in 2021.

According to Urbanation, new condo sales in the GTA reached 30,844 units last year, marking a 69% annual gain and almost hitting the previous sales record of 31,216 units seen in 2017.

The report shows the market finished the year on a strong note with sales in Q4 reporting a 77% annual hike with 8,361 condos sold. It’s a new record for the quarter.

The number of new condos entering the market in 2021 was the third-highest ever at 26,835 units. However, it was still not enough to meet the strong demand. Urbanation says unsold inventory was down to its lowest level in more than a year.

“Even with a large gain in new condo project launches last year, the market demand kept outpacing supply and leaving the market with extremely low inventory and fast growing prices. As the resale supply is also restrained, we should expect competitive market conditions in the nearest future,” – Shaun Hildebrand, president of Urbanation, noted.

According to certain economists, the main factor improving housing affordability in such hot markets as Toronto is raising the real estate supply. At the same time, higher borrowing costs may slow demand in the coming years.

“By the second half of the year, interest rate hikes, record condo completions, and policy changes possibly affecting investors should moderate the presale activity,” – Hildebrand believes.

The market conditions keep tightening, and the average price per square foot for a new condo in the Q4 was up by 18% on a year-over-year basis reaching $1,322. The largest gains were seen in Toronto suburbs.