Market News: Sales on par with last decade

Six months in and the year is turning out … well, pretty average.

The Building Industry and Land Development Association (BILD) and market analysis firm RealNet Canada have released their sales numbers for the first six months of 2012, with some unsurprising results. While the 20,785 new homes and condos sold between January and June is down from last year’s 24,107 at this time, it’s on par with other years in the past decade. After the first six months of 2010, for example, only 19,664 units had been sold.

“The demographic realities of the Greater Toronto Area are that in and around 40,000 homes have to be built [annually] to house the approximately 100,000 people that come to this region every year,” says BILD president and CEO Bryan Tuckey. “So when we put … the first half of the year’s sales into that context, we find that sales of new homes and condominiums in the GTA have remained very steady, with more than 20,000 new homes being sold so far this year.”

It’s not only year-to-date sales that stayed on point. In June alone, 3,461 new home and condominium sales transpired across the GTA — down 27% from last year’s stronger-than-normal numbers, but on track with years before that. In 2010, 3,063 new home sales were completed in June.

Last year, in other words, was an anomaly. “If you look at 2008 and 2009 they were well below forecast, so I think there was a latent demand that was seen in 2011, which really did bring the average up a bit over the course of the year,” Mr. Tuckey says.

But trends that were obvious through 2011 are continuing in 2012. The 905 regions continue to see condominium growth, while the shift from low-rise to high-rise sales throughout the GTA is still prevalent. That’s evident in the numbers: While January to June 2012 saw the second-highest number of new high-rise sales on record (next to 2011), it’s the fourth-lowest on record for low-rise (meaning single-family homes). There are three main reasons for the shift, Mr. Tuckey says: provincial policies focused on intensification, land supply constrictions and the price difference between low-rise and high-rise that make condos more affordable for buyers.

In fact, at $603,102, the index price for low-rise in June was up 10% over June 2011, while the high-rise index price decreased by 6% over last June, to $432,256.

So what should buyers expect to see when the new home and condo market numbers are released for the rest of the summer? An enduring return to average, says Jasmine Cracknell, partner with Toronto real estate consulting firm N. Barry Lyon Consultants Limited. “It’s going back to more normal market conditions, where the seasonality is coming into effect,” she explains.

“In the summer it’s going to taper down a bit, and then we expect in fall it’s going to ramp up again.”

http://life.nationalpost.com/2012/08/07/market-news-sales-on-par-with-last-decade/

Posted via email from Markham Real Estate Today with Asif Khan