Only One Number Counts in the New Condo Market

26 March 2014

Unlike the Toronto MLS, statistics for new condo sales are tracked by four major research companies. In no particular order they are: Barry Lyons & Associates, RealNet Canada, Urbanation, and Housing Lab Toronto. All four companies do a great job but they have to accept the numbers given to them by developers without third party verification. Hence at times their figures for sales, construction, and occupancy, can differ. Hence the only true number that we can all agree upon. with a fair degree of accuracy is completions or unit registrations (the date mortgages are placed on a condo and property taxes are calculated for the owner). The second fact that we can all agree on is that construction delivery causes a bottle neck in the delivery of new condo units to the market. So forget about new sales in any one year, and forget about units under construction. What you need to look at are completions: how many new units are entering the housing market each year. Due to population growth in the GTA, you need about 35,000 new units each year. The low rise market is on a downward trend and they can only deliver 12,000 new units a year. The maximum number of new condo units delivered in any one year since 2000 has been less than 20,000 units. Would we be worried about rising interest rates? No. Rising rates means the economy is much better – more jobs and higher wages to offset these increases. What we would be worried about is if immigration into the GTA were to slow from 75,000+ people each year to something like 25,000. These are the points for discussion about the new condo market in Toronto. Forget the rest of the rhetoric!