Since the first Toronto condo project kicked off sales just six days into 2022, the Greater Toronto Area pre-construction market has been hot. New data insights shared with Livabl show that substantially more units have been launched during Q1-2022 compared to last year, and more are on the way.
Pauline Lierman, Zonda Urban’s vice-president of market research for Ontario and Quebec, told Livabl that by the end of March, about 9,750 new condo units could launch in the GTA during Q1-2022.
As of March 7th, Lierman said that there have been 25 condo apartment project launches in the GTA totalling approximately 7,964 units. In Q1-2021, there were 14 project launches with 3,931 condo suites. Overall, Q1-2022 has delivered 50 per cent more units to the market than a year ago.
“Crazily enough, we have not yet reached the next wave of typical March launches,” Lierman said in a statement. “While some of these may not start doing firm sales until the second quarter period, I have another 10 potential projects, which would bring up that total to around 9,750 units that could be launched by the month’s end.”
416 and 905 condo launches neck and neck
As buyers look to get more bang for their buck, some have traversed into the GTA’s suburban areas. When it comes to new condo launches, however, the 416 and 905 areas have produced similar amounts.
Lierman explains that the two regions have been nearly evenly split, with 13 launches in the 416 area and 12 launches in the 905 to date. The 416 also leads with the total number of new units being brought online during Q1-2022 with 4,981 condo suites launched in Toronto versus 2,983 units in the 905. Not all of these projects are downtown — only four of them are located in the core downtown submarkets.
“Project openings are broadly spread across the GTA, from Durham Region to Halton and Hamilton, and within the outer 416 former municipalities, including two with direct proximity to the edging-towards-endgame Eglinton Crosstown LRT,” said Lierman. “Oakville and Milton continue to be high in-demand market areas.”
While Zonda Urban is working to confirm this data, Lierman said that her early estimate is “a minimum half of the released units thus far are sold,” which includes some near or fully sold out buildings. The remainder of the launches are more recent and are just starting to write deals. Lierman expects most of these to hit 70 per cent sold within a month, with total sales activity rising as the marketing of the more recent launches progresses.
“The rapidity of absorptions has clipped by even what I would call strong selling periods in past quarters,” she said.
Rising costs, high demand driving developers to launch now
It’s not just one reason that is prompting developers to launch new condos sales now as opposed to later this year.
Lierman explains that low supply, high demand, rising construction costs and development charges in addition to interest rate increases are all influences driving developers to launch now.
“Developers have had many of these projects set to go, so why not launch when conditions are at their most receptive?” she said.
Lierman anticipates that we’ll see a good pace of launches as we head towards the early summer. Last year and 2020 were atypical periods for market activity, with launches increasing as COVID-19 cases and restrictions eased during the summer months. Should we “approach some sort of normalcy,” Lierman notes that the pre-construction market might see a return to a slower summer for Q3-2022 followed by a typical ramp up into the fall.
