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Toronto high-rise market hits high

Sales of new high-rise condominium suites in the Greater Toronto Area last year came within a hairs-breadth of the all-time high while the proportion of high-rise sales smashed the all time record, Bob Finnigan, president of the Greater Toronto Home Builders' Association and Urban Development Institute/Ontario (GTHBA-UDI) said yesterday.

The new home sales data, compiled for GTHBA-UDI by RealNet Canada Inc., reveals that there were 17,617 new high-rise condominium suites sold in 2006, a mere 23 units fewer than in 2005, when the previous record was established. However, with 4.4 out of every 10 new home sales in 2006 being high-rise condominiums, the proportion of the total new home market made up of this built-form reached new heights, up from 42 per cent in 2005 and 33 per cent in 2004.

In total, there were 39,790 new home sales in 2006, down 2,202 units or 5 per cent from 2005, but still a very good year relative to the forecasts and historical standards. While high-rise sales held their own, low-rise (single- and semi-detached units and town-homes) unit sales declined by nine per cent year over year resulting in the overall five per cent decrease.

"The new home market remains strong and vibrant, based first and foremost on the aspirations of GTA home buyers to buy their first home or move up to their dream-home, combined with low mortgage rates and tremendous choice and value in the new home market," Finnigan said.

Finnigan noted that the increasing high-rise market share is a reflection of the $82,097 price differential between low- and high-rise units. The RealNet new home price index for low-rise homes currently sits at $403,450 while the high-rise index is $321,353.

The index is essentially the average asking price of all the remaining new homes and condos currently available for sale, as calculated by RealNet Canada Inc., the GTHBA's independent source of new home market information.

The new home price index is based on currently available new home offerings, weighted by remaining inventory, for projects of 15 or more units, excluding ultra-luxury product across the GTA.

Finnigan added that the price differential shrunk from over $95,000 a year ago, as high-rise prices increased much more (9.1 per cent) than low-rise prices (3.4 per cent) over the last year. On that basis, he foresees a rebalancing of the market in 2007 with a very healthy forecast of 37,500 new home sales split 60/40 low/high rise.

January 26, 2007 in Toronto Real Estate Update | Permalink


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