Condo prices continue to rise in the Toronto metropolitan area, even when the amount of available supply, which would alleviate inventory pressures. The average sale price of new development projects in the third quarter of 2018 was $ 745 per square foot, 11% compared to recent years.

For unsold units, sales prices gained 19% to $ 972 per square foot on average. The Urbanation's third quarter 2018 condo market report also reveals that average condo resale prices increased 6.5% year-over-year to $ 690 price per square foot, or $ 577,000 based on an average size of 837 square feet; a strong deceleration of the annual rhythm of 27% registered in Q3-2017.

Sales increased in the third quarter, but YTD has dropped from a record high.

Sales of new condominiums in the third quarter increased 4% to 4,738 units in Q3-2018, reaching the third highest volume in Q3 of the last 10 years. So far this year, sales of 14,055 units decreased 46% from the record of 25,839 sales recorded during the same period of the previous year. Meanwhile, resales won for the first time since the first quarter of 2017, with an increase of 2% year-over-year to 5,253 units.

Construction began at a record 8,150 new condominiums in Q3-2018, bringing the total number of condominiums under construction to a new maximum of 67,581 units in 236 buildings. The projects under construction were 95% pre-sold on average. The condo market has performed exceptionally well during its transition from a superheated 2017.

Low supply and stabilized demand should continue to provide structural support for prices. However, signs of a slower pace of price growth ahead of factors such as higher interest rates and higher completions should be taken into account in the decision making regarding the purchase of investment units, said Shaun Hildebrand, president of Urbanation. If you have questions about the real estate market in Ontario, do not hesitate to contact me.