Multifamily Housing Sales are Down More Than 30% in the GTHA
Despite the fact that condo sales were the fastest-recovering segment post-pandemic, multifamily housing sales in the Greater Toronto and Hamilton Area (GTHA) took a dip in the second quarter of 2022. This is according to survey results from Zonda Urban, released today.
According to the results, new multifamily housing sales dropped 32% compared to this time last year. The drop was also notable on a month-over-month basis, with only 6,842 condominium apartments and townhouses sold in Q2, compared to 8,479 sales in Q1. Q1’s results marked a 65% jump year over year.
Zonda Urban’s data also showed that though the GTHA’s housing market was supplied with 9,069 new condominium apartments in Q2, only 64% of these units were sold by the end of the quarter. Again, that is a low proportion when you compare it to Q2 2021 and Q1 2022, when 80% and 74% of new condominium apartments were sold by the end of the respective quarters.
Pauline Lierman, Zonda Urban’s Vice President of Market Research (ON/QC) says this kind of slow-down is not necessarily unexpected for this time of year. At the same time, there are many factors working against affordability in today’s housing market. As such, buyer confidence is faltering, particularly when it comes to big-ticket purchases, such as investing in a home.
“The GTHA multi-family market is now in its third year of pandemic-related breaking of pre-COVID market trends,” says Lierman. “The second quarter is usually a period when developers ramp up new project launches, achieving the larger share of their annual sales. The headwinds of change impacting affordability due to rising interest rates and construction costs moderated sales in the second quarter. Early signs from launches during the third quarter point toward further slowing in sales activity.”
On another hand, new condominium apartment units sold for a higher average price by 19% year over year — $1,302 psf or $843,740 psf in Q2 2022 compared to $1,094 psf or $723,256 in Q2 2021.
Additionally, the 905 municipalities saw strong price growth, with new units selling for an average of $1,197 psf or $809,434. That’s 20% higher than the Q2 2021 average, which was $1,094 psf or $723,256.
Downtown Toronto also registered a price growth. The city core saw a growth rate of 10% year over year, with new units selling for an average of $1,597 psf or $939,027. It’s worth noting that a big chunk of Toronto’s condo inventory is in limbo.
“While the market is not at a standstill — projects in locations with limited new supply and/or higher demand are still seeing stronger volumes; much of the industry is carefully evaluating the next eight to 12 months,” says Lierman. “We will likely see a share of projects delayed or ‘shelved’ until the economics are right. Developers also must consider inventory in already launched projects and if held back units looking for higher prices in the longer-term will be achievable.”
New townhouses also saw an increase in sales and selling price. In Q2, the GTHA saw 1,099 new townhouse units, and 56% of them were sold by the end of the quarter. Meanwhile, the average selling price was $1,354,699. With that said, new townhouses priced under $1M were far and few between. Ajax/Pickering and Hamilton were the only markets offering a lesser average price tag, with average selling prices of $914,439 and $878,086, respectively.