In the last two months, condo starts in Toronto established a new record for a month of Marchand a month of April respectively, intensifying fears that a market correction is in the offing. As today’s Hot Chart shows, starts have undeniably exceeded the number of new condos absorbed lately. As a result, the number of condos under construction has grown so as to represent 34 months of the current absorption rate, from 20 months six months before.
In the past, large increases in the number of condos under construction occurred, but did not result in a glut of new unoccupied condos. Will it be different this time? According to Urbanation, unsold units incondo projects in Q1 increased 4% over Q4, and could rise by a further 9% in Q2, a worrisome trend. The worst outcome is that speculators continue to buy at already high prices, spurring starts, only to find themselves unable to flip with profit down the road. A healthier outcome is that declining pre-selling rates cause project cancellations. Time will tell.
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Toronto Condo Market: Ripe For A Correction?
Published 05/10/2012, 09:27 AM
Updated 05/14/2017, 06:45 AM
Toronto Condo Market: Ripe For A Correction?
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