Low-rise home sales decline, record condo surge continues

Low-rise home sales decline, record condo surge continues

February 03, 2007

Real Estate Reporter TORONTO STAR
New highrise condos continue to sell at record levels in the Greater Toronto Area.

New figures released by the association representing the region’s builders show that total sales for 2006 were virtually tied with those of 2005, a record-setting year.

There were 17,617 new highrise condo suites sold in 2006, only 23 units fewer than 2005, according to the GTHBA-UDI (Greater Toronto Home Builders’ Association-Urban Development Institute).

Highrise condos continue to make up a greater portion of all new homes sold, eating into the low-rise sector’s market share.

Some 44 per cent of all new homes sold last year were highrise condos, compared to 42 per cent in 2005 and 33 per cent in the previous year.

Meantime, sales of single-detached, semi-detached and townhomes continue to decline. A total of 22,173 low-rise units sold last year, down 9 per cent from 24,352 units sold in 2005.

With this decrease taken into account, overall sales of new homes in the GTA – both low-and highrise – increased by 5 per cent.

“The new home market remains strong and vibrant, based first and foremost on the aspirations of GTA homebuyers to buy their first home or move up to their dream home, combined with low mortgage rates and tremendous choice and value in the new home market,” says GTHBA-UDI president Bob Finnigan.

Affordability is a big factor behind the surge in highrise sales, Finnigan says.

There is an $82,097 price differential between low- and high-rise units, he noted.

The RealNet new home price index for low-rise homes currently sits at $403,450.

The highrise index is $321,353.

The index is essentially the average asking price of all the remaining new homes and condos currently available for sale.

It is calculated by RealNet Canada Inc., the GTHBA’s independent source of new home market information.

Finnigan added that the price differential shrunk from over $95,000 a year ago, as highrise prices increased much more (9.1 per cent) than low-rise prices (3.4 per cent) over the last year.

He foresees a rebalancing of the market in 2007 with a very healthy forecast of 37,500 new home sales split 60/40 for low/highrise.

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