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GTA new home sales up
Strong condominium sales in October have kept the Greater Toronto Area new home market on par with last year’s near record pace. Sales of new housing hit 4,535 units last month, up by 0.6 per cent from the same time last year according to figures released by the Building, Industry and Land Development Association on Monday. The positive figure is a major rebound from September, when sales were down by 32 per cent.
The October numbers are the best such result for the month since 2000, according to BILD.
Most of the bounce is due to continued strong high rise sales, with seven out of ten homes sold in October being a condo.
High rise sales were up by 27 per cent, while low rise sales were down by 32 per cent.
“Clearly investors are still active in the property market,” said housing analyst Will Dunning. “It remains to be seen how this will all play out.”
Some analysts have said there are too many high rise buildings being built.
But some empty nesters, particularly from areas such as China which are extremely active in the Toronto market, may not be as sensitive to local market conditions and are looking for long term appreciation, said Dunning.
While the city of Toronto accounted for most of the condo sales at 76 per cent, the largest percentage spikes were in the 905 suburbs such as Mississauga and York Region.
“The high rise housing craze has started to spread to the suburbs, and it’s a trend which will continue to grow,” said BILD.
The more affordable condominium sector has taken off because low rise homes have been priced out of the reach of many buyers. Investors meanwhile, continue to be attracted to the relative stability of the Toronto market.
There is a $75,000 difference between high rise asking prices at $424,327 and low rise prices which surpassed the half million dollar mark for the first time in October, hitting $500,532.
Overall, new home sales are running 15.5 per cent ahead of 2009 on a year to date basis. However, sales are not expected to continue to outperform.
A forecast by the Canada Mortgage and Housing Corporation says that a weaker 2011 is expected especially in comparison to the already softening resale market.
“The new home market typically experiences a more pronounced decline than the resale market when conditions soften,” said the CMHC’s Shaun Hildebrand.
New condo sales are also expected to give up share to the resale market because of the large number of completions.
“Buyers will take advantage of the increased selection and improved negotiation power for existing units,” said Hildebrand. “The growing gap between prices for new unsold product and selling prices in the resale market should require an adjustment in inventory.”
Affordability issues means that builders will likely have to keep building smaller units to keep first time buyers and investors interested in the market according to the CMHC.
November 23, 2010 in Toronto Real Estate Update | Permalink
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Comments
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Posted by: Marketing Company | Feb 8, 2011 1:22:32 AM
Home sales in the first two weeks of January almost doubled in comparison to last year, according to the Toronto Real Estate Board.I i think theres a thing under options about friendly fire in free mode.
Posted by: laptop sleeve | Jan 7, 2011 12:34:32 AM
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Tacoma Homes
Posted by: Danny | Dec 13, 2010 9:15:45 PM
Yes Prem Brampton is getting hit hard but if you like power of sales brampton has many of those. Brampton is looking more like the US everyday. Realtors are having a problem moving inventory unless it's bank owned and priced at a large discount. Find a realtor in the area and find yourself a home. I am sure from what I hear you can low ball any home in Brampton by 25-35% off.
Posted by: realtor | Dec 1, 2010 6:20:37 PM
Brampton RE board has yet to release sept and Oct sales. How bad of a housing crash is brampton in?I heard remours that it's over 50% drop in sales for both September and October. Since No numbers have been released who knows?
http://www.bramptonandarearealestate.com/2010_Residential.html
Posted by: Prem | Nov 24, 2010 12:21:57 AM
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