How COVID-19 has impacted the condo market
Toronto’s condominium market showed significant slowdown in the second quarter, with sales dropping to their lowest levels since 2009, according to the Q2-2020 Condominium Market Survey released by Urbanation Inc.
The survey results, published Monday, found that sales of new condos dropped 85 per cent during the second quarter of 2020, with only 1,176 units being launched for pre-sale compared to 11,415 units in the second quarter of 2019.
Despite the lower-than-normal sales activity, the survey saw an upward trend in both price and construction, with developers regaining confidence throughout the quarter as sales became virtual, inventories stayed low and construction on new projects resumed.
Selling prices for actively-marketed new condos in the Greater Toronto Area (GTA) rose eight per cent year-over-year, with new projects averaging a record $867 per-square-foot (psf) compared to $864 in the first quarter. The price of unsold units in 2020 increased nine per cent year-over-year, edging up from $1,080 psf in the first quarter to $1,087 psf.
The third quarter is expected to see an improvement in condo supply, according to Urbanation, with projects that were delayed to the fall amid COVID-19 closures being pulled back to the summer as the resale market stabilizes.
Despite government-mandated COVID-19 restrictions in April, new condo construction increased 45 per cent year-over-year in the second quarter, with the total number of condos under construction reaching a near-record high of 78,212 units. The growth in condo development has been largely driven by the 905 region, according to Urbanation, with markets outside of the downtown Toronto performing best during the COVID-19 period.
“The GTA condo market showed resiliency in the second quarter, albeit with much lower than normal activity,” Shaun Hildebrand, president of Urbanation, said in a release.
“More telling will be the second half of 2020, which will see supply pick up from growth in new launches and the nearly 14,000 units that are scheduled for completion in the next six months.”