Toronto has solidified its spot as North America's largest condominium market, according to a report that says 259 projects are in the works in the city's census area.
Urbanation, one of the country's major condominium market research firms, says condo sales skyrocketed over the first nine months of 2007. There were 16,790, sales - more than all of 2005, which was a record year. Sales will likely reach 21,000 by the end of the year. By comparison, New York City usually records about 10,000 condo sales a year.
"This is the highest number we've ever tracked since we started in 1981," said Jane Renwick, executive vice-president of Urbanation. "If you look at our [research], sales just keep going up, up, up."
Urbanation, which tracks just about every condo in the city, says its quarterly research report has grown into a 360-page mini-encyclopedia from modest beginnings when it looked more like a small pamphlet on the condo sector.
The city's red-hot condo sector came under scrutiny last week when sales at a tower planned for Yonge and Bloor streets resulted in lineups and prices skyrocketing overnight.
The proposed 80-storey One Bloor St. is said to have started with prices of $650 per square foot for VIPs and has escalated since. The site is located near the most expensive hub of the 52 submarkets in the census metropolitan area, which stops at Ajax in the east, and Burlington to the west.
Bloor-Yorkville gets the nod as the most expensive submarket in the city with an average price of $839 per square foot, which would get you a small one-bedroom apartment for $1-million. The market is home to Toronto's most expensive condo tower, the Four Seasons Hotel and Residences.
Sale prices in the Four Seasons' east building have averaged about $1,250 per square foot, while prices in the west tower go for $1,450 per square foot. Prices have since climbed, and the west tower is now asking about $1,600 a square foot, making it Toronto's most posh address.
The 53-storey Ritz-Carlton Hotel and Residences has the largest condominium under construction in the city, with a 10,820 square foot mansion in the sky planned, according to Urbanation.
While the so-called trophy buildings are getting all the attention in the city, Ms. Renwick said, they are hiding the fact that the condo market is growing at a steady pace across Toronto. The 416 area code accounts for 79% of transactions and 905 accounts for 21%.
The average sale price across the Toronto census area is $371 per square foot, up 10.1% from a year ago. Sale prices have jumped from about $180 per square foot in 1996.
It has eaten into affordability. To carry a 700-square-foot apartment - the average size of a unit in the city - a consumer would need about $70,000 in household income, based on a standard mortgage with 25% down.
Affordability has eroded quickly after remaining relatively stable for most of the decade. From 2001 to 2005, a buyer needed about $54,000 to $57,000 to carry that same 700-square-foot apartment in Toronto. It climbed to $63,000 by last year, rising another $7,000 this year.
Despite the cut in affordability, some of which has been driven by rising interest rates, Ms. Renwick said speculation is hardly rampant.
Urbanation said of the 259 projects in the works, it estimates 30% of units were bought by investors. The other 70% of the condos to go up in the next five years will be owner occupied. That 70% is made up of 30% first-time buyers, 20% move-up buyers and 20% people downsizing.
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