Heated first half of 2022 closes with slowing sales
TORONTO, Aug. 2, 2022 /PRNewswire-PRWeb/ -- Zonda Urban today released its Q2-2022 Greater Toronto and Hamilton Area (GTHA) Multi-family market survey results.
New multi-family housing sales fell 32% year-over-year with 6,842 condominium apartments and townhouses sold during the second quarter in the GTHA. The decline in sales during Q2-2022 was notable after the year began at a blistering pace during Q1 (8,479 sales), which marked a 65% annual rise last quarter.
"The GTHA multi-family market is now in its third year of pandemic-related breaking of pre-covid market trends," says Pauline Lierman, Zonda Urban's Vice President Market Research (ON/QC). "The second quarter is usually a period when developers ramp up new project launches, achieving the larger share of their annual sales. The headwinds of change impacting affordability due to rising interest rates and construction costs moderated sales in the second quarter. Early signs from launches during the third quarter point toward further slowing in sales activity".
"While the market is not at a standstill—projects in locations with limited new supply and/or higher demand are still seeing stronger volumes; much of the industry is carefully evaluating the next 8 to 12 months," continues Lierman. "We will likely see a share of projects delayed or 'shelved' until the economics are right. Developers also must consider inventory in already launched projects and if held back units looking for higher prices in the longer-term will be achievable."
There were 9,069 new condominium apartments brought to the market in Q2-2022 with 64% of these units sold by the end of the quarter, down from 80% in Q1-2022 and 74% a year ago. New units launched in the GTHA sold for an average $1,302 psf, or $843,740, up 19% from new units launched and sold in Q2-2021 ($1,094 psf, or $723,256).
Price growth was strongest in the 905 municipalities with new units launched selling for $1,197 psf, or $809,434, 20% higher than the Q2-2021 average of $1,094 psf, or $723,256. Despite the downtown Toronto cityscape continuing to be crane heavy, with thousands of units under construction, price resistance in the core kept the annual rate of growth slower at 10% with new units at project launches sold for an average $1,597 psf, or $939,027.
In the new townhouse market, the share of sales of the 1,099 units released in the GTHA was 56% with the average new townhouse unit now selling for $1,354,699. Prospective buyers of new townhouses seeking new units under $1 million were limited by market area with only the Ajax/Pickering and Hamilton markets under this threshold at an average $914,439 and $878,086, respectively.
The Q2-2022 Zonda Urban GTHA Multi-family Take report will be released shortly with additional perspective on the recent market.
Methodology
Zonda Urban provides insight on multi-family and rental housing activity in the Greater Toronto and Hamilton, Ottawa, Vancouver, Calgary and Edmonton markets, utilizing primary sourced data from developers, their representatives and brokerages.
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Zonda provides data-driven housing market solutions to the homebuilding industry. From builders to building product manufacturers, mortgage clients, and multifamily executives, we work hand-in-hand with our customers to streamline access to housing data to empower smarter decisions. As a leading brand in residential construction, our mission is to advance the home building industry, because we believe better homes mean better lives and stronger communities. Together, we are building the future of housing.
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