Toronto new condo sales took a nose-dive in the first quarter of 2013, according to condominium market research company Urbanation.
A total of 2,728 new condo apartments were sold in the first three months of 2013, marking a 29 per cent decrease from the last quarter of 2012, and a 55 per cent decrease from the first quarter of 2012. The average price index increased 2.5 per cent year-over-year in Q1, well under the 6.4 per cent annual average over the past 10 years.
Urbanation Senior Vice President Shaun Hildebrand said a drop in sales had been anticipated.
“Given the sales numbers we saw in 2011 and up until the early part of 2012, which were on fire, that type of momentum had to give,” he told the Toronto Star.
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In October 2012, construction data service Emporis named Toronto "North America’s new high-rise metropolis," with the most high-rises under construction on the continent, prompting concerns over a disconnect between supply and reduced demand.
In November, Urbanation executive VP Ben Myers said developers had reacted to a sharp downturn in sales and began to put the brakes on project launches.
Project launches for 2013 have reached the lowest levels since fall 2009, the Star pointed out.
Hildebrand expects the downward trend to improve later in 2013, thanks to competitive prices and new projects in Q2, the statement said. He pointed to resale figures for signs of improvement. Those sales jumped by 9 per cent from 2012’s Q4 to 2013’s Q1, although average index prices fell 0.5 per cent.
On a national level, building permits increased 8.6 per cent in March, albeit mostly thanks to a demand for new institutional buildings, Canadian Press reported.
Residential building permits grew 1.7 per cent to $3.6 billion in March, following an 8.1 per cent decrease in February. CIBC economist Emanuella Enenajor attributed the overall decline to the government tightening mortgage rules last year and a “deceleration in demand."
— With files from The Canadian Press