Sales of new condominiums in the greater Toronto area declined by 19 per cent sequentially in the second quarter of this year, while the average price per square foot reached a record high of $1,453, according to the latest report from real estate consulting firm Urbanation Inc.
A total of 6,792 new condo units sold in Q2 of 2022, plummeting 24 per cent compared to a year prior. Sales did however remain above the 10 year average.
The drop in buying activity caused 11,703 new condo units to remain unsold, marking a 36 per cent increase from the 18-quarter low in the first quarter of 2022. Despite this uptick, the figure is still a six per cent decline annually.
While new condo purchases slowed, the cost per square foot of these units surged by 20 per cent on an annual basis, reaching an all-time high.
Several driving factors were behind the price spike, including soaring construction costs, labour shortages and higher-priced projects, according to the report. Looking ahead, rising interest rates and delayed approval timelines for projects will likely keep the cost of new condos elevated.
“Prices are expected to hold firm amid low inventory and high development costs,” Shaun Hildebrand, president of Urbanation said in a press release on Tuesday.
“The strength in the rental market and shift in demand towards more affordable ownership options should provide support for condominium activity as the market works through the effects of higher interest rates.”
The supply of presale condo units reached the third highest volume of on record with 9,924 units to hit the market in Q2. The recent pullback in buying activity however has caused main way projects to cancel or delay future launch plans.
The data shows there were 35,000 new condo units anticipated to come to market for the region in 2022. In the first half of this year, roughly 16,000 units have launched and 10,000 more are expected, leaving 10,000 units on hold.