Sales of new co-ops in the Greater Toronto Area declined in the second quarter of 2022 as prices rose to record highs in April, May and June.
Data compiled in a recent market survey by Urbanation Inc. showed that 6,792 units were sold in the second quarter, down 19 percent from the first quarter and 24 percent from a year earlier.
At the same time, prices for those new units rose to an all-time high of $1,453 per square foot, which the firm said was partly the result of increased inventory in higher-priced projects in the city.
“The new housing market is likely to continue to slow in the near term from last year’s record highs as buyers exercise caution before selling and developers slow new openings, with an emphasis on completing projects already underway,” Urbanation President Sean Hildebrand said in a news release issued Tuesday.
And those extremely high prices aren’t expected to drop anytime soon, something Urbanation attributes to the number of prospective tenants in the market.
“The strength of the rental market and the shift in demand to more affordable ownership options should provide support for condominium activity as the market works through the effects of higher interest rates,” Hildebrand said.
That’s backed up by another study released by Urbanation last month, which found Toronto rents rose at the “fastest pace on record” in the second quarter — up 5.9% from the first quarter of 2022 .and 16.7% on an annual basis.
Last week, RBC published a report suggesting that a “historic” housing correction is underway across the board, and pricier markets like Ontario and British Columbia are likely to be the “epicenter” of the downturn amid higher interest rates rising construction costs and labor shortages.
Discontinued GTA apartment listings for the month of June show that the market is already feeling the pressure. According to Strata, a Toronto-based real estate platform, canceled listings in Toronto are up 643 percent since January.
In fact, Urabanation said about 11,700 units remained on the table in the second quarter, a 36 percent increase from the previous quarter.
The slowdown is also felt in the pre-construction market.
Urbanation said that to deal with the downturn, some developers are delaying or canceling plans to launch entirely, a decision they say will result in 10,000 pre-sales not yet built this year alone.
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