Condo sales in the Greater Toronto Area set a Q1 record by reaching 8,253, Urbanation reported this morning.

That represents a 55% year-over-year increase and surpassed the 10-year average of 5,164 sales by 60%. Urbanaion also reported that 94% of pre-construction were pre-sold, setting another record, which reduced unsold inventory to an 18-quarter low of 8,726 units.

Demand for new condos has outstripped supply over the last two quarters, with the total number of transactions being greater than the number of pre-sale units launched by 4,417 units. Consequently, unsold inventory declined by 34% over the last six months, leaving 3.1 months of supply on the market -- a record low for the GTA new condo market. Moreover, the average price of an unsold unit rose by 16% year-over-year to $1,381 per sq. ft.

However, while pre-construction condo demand is elevated, more expensive materials have resulted in reduced construction activity for the first time in two years, Urbanation reported, declining to 86,766 units in Q1 from 88,773 Q4-2021. The reason for the decrease in new activity is construction costs are rising faster than sale prices.

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Developments in the former City of Toronto recorded the slowest price appreciation, Urbanation said. In the last year, new condo prices in the area rose by 14% and, at an average of $1,637 per sq. ft, are the highest in the GTA, however, prices in Etobicoke, North York and Scarborough, known as the outer 416, grew by 23% to average $1,244 per sq. ft. Likewise, prices in the 905 increased by 23% to $1,073 per sq. ft. In the last year, as a share of new condo sales in the GTA, the former City of Toronto recorded a record low of 29%, which decreased by 45% from five years earlier and by 52% from a decade ago.

In the condo resale market, the average price per sq. ft increased by 12.7% in Q1 from a quarter earlier, which Urbanation said is the fastest quarterly increase on record, and which it surmised is the result of buyers trying to get into the market before an anticipated series of interest rate increases. As a result, resale condo prices grew by 19.5% year-over-year in the first quarter to $986 per sq. ft -- that would amount to $811,000 for an 823 sq. ft unit -- which is 24% higher than the average price per sq. ft in Q1-2020.

Just as in the new condo market, resale condos’ prices grew faster outside of the former City of Toronto, where they only increased by 13.7%: In the 905, prices rose twice as fast, reaching 27.8%, while prices in the outer ring of the 416 grew by 21.6%. The average GTA resale price broke $800,000 last quarter for the first time ever, and buyers, in search of value, focused on the outer 416 and 905 regions, where prices averaged $766,000 and $761,000, respectively.