Pamela Vasiliu
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RE/MAX Professionals Inc.
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Date: Wednesday October the 18th, 2017 
416-236-1241

 

   

Toronto Condo Market Loses Steam As Investors Bolt

August 3, 2012 - Updated: August 3, 2012

 

 

 

 

Condo Market May Be losing Ground

At the same time, sales of new units sank to their lowest since about mid-2010, down more than 20 per cent from the first quarter and a whopping 50 per cent from a year earlier, although last year's numbers were particularly strong. And over the course of the first six months of the year, sales are at their second-highest level ever.

Notably, the so-called absorption rate declined to the lowest since late 2008, the depths of the financial crisis.

That's because investors are dropping out, said Derek Holt and Dov Zigler of Bank of Nova Scotia.

"The not-for-occupancy investor that has been driving 45 per cent to 60 per cent of Toronto condo sales in recent years disappeared as the monthly net cash flow to financing and paying condo fees and then renting it out remains negative while rental rates and prices flatten out," they said.

"This hard data confirms the anecdotes of pulled project openings and construction delays this year," the economists added in a research note.

"The macro implication of key relevance here is that this will put downward pressure upon housing starts over [the second half of the year] as builders respond to the inventory overhang and given the big role that multiples in cities like Toronto and Vancouver have played in driving the headline construction figures."

Urbanation also noted the record 52,695 condo units under construction at the end of the last quarter, 88 per cent of them sold.

Toronto Condo Market Loses Steam As Investors Bolt   

 

 

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