Urbanation releases Q3-2020 market update — new condo sales reach record high

The right time to buy things is usually when other’s aren’t, which is why I’ve felt that this year was a great time to buy a centrally located condo. Cities aren’t going anywhere. This isn’t their first pandemic. Downtown demand will return as soon as urban life returns and the majority of people are back in their offices next year.

I’ve also been predicting that the run-up in single-family home prices that we have seen this past year here in Toronto will eventually lead to a surge in demand for condos (and perhaps even for larger suites). It’s a question of relative affordability. And so it was interesting to see Shaun Hildebrand of Urbanation predicting the same thing for 2021 in this recent Toronto Star article.

Hildebrand thinks the soaring prices of single-family homes will also push more buyers back to the condo market.

As of November, the average price gap between condos and detached houses was $596,000. The gap between a condo and a semi-detached or townhome was about $217,000. Both of those were at their second-highest levels since the market peaked in late 2016-early 2017, he said.

“This could really start to swing demand towards condos in the second half of the year,” said Hildebrand.

Realosophy data shows condo sales were already up year over year prior to the holidays —

23 per cent the first week of December,

31 per cent the second week and

72 per cent the week of Dec. 14.

That means 727 condos sold that week, compared to 418 in the same week last year.

Urbanation just released its Q3-2020 market update for the Greater Toronto Area and the data is very encouraging for the new condo market. Here are some of the highlights:

• There were 6,730 new condominium unit sales in Q3. This represents a 30% year-over-year increase.
• More of this growth happened in the suburbs (905) with 3,834 units sales vs. 2,536 unit sales in the City of Toronto (416).
• Of the 6,694 units that launched for sale in Q3, about 3/4 of them sold. This is the highest absorption rate since Q4-2017.
• The average selling price for a new condo launched in Q3 was $1,044 psf (GTA average). This is up 3.5% compared to last year.
• New launches in the suburbs sold for an average of $915 psf. New launches in the City of Toronto sold for an average of $1,275 psf.

I reckon that many of the people purchasing right now are looking through and to the other side of this current macro environment. They recognize that things will get better and that the Toronto region will continue to thrive. That’s certainly how I’m thinking about it.