How To Track The Toronto Condo Market

29 October 2014

Last week we talked about how you can track and forecast the condo market. We said all you need to do is look at three statistics.

  1. The level of immigration in the GTA
  2. The annual level of new condo completions
  3. The amount of mortgages in arrears

Today I want to talk about the second statistic, Condo Completions. In the pre-construction market, there are all sorts of stats. From new condo sales to units under construction, to unsold units and more. The problem with all these numbers is there is no third party verification and no agreed upon definitions. Anyone can report pre-construction sales, and what does under construction mean? It could mean a hording around a building site or a building thirty four stories in the air. The only real number is condo completions, that is, when a condo units is registered and enters the housing pool. The fact is new registrations in any one year have never topped 20,000 units, regardless of what the sales where over the previous few years. That's because there is a construction bottleneck. So no matter what the sales are we are only able to deliver a bout 20,000 units. For example, the L Tower sold in 2007, but it is only going to be registered in 2015. The fact is we need about 25,000 new completions every single year just to keep up with the level of immigration.