It went by like a whirlwind, but the first half of 2012 is now behind us. Working with RealNet, BILD GTA has gathered the sales data for the first two quarters of the year. While the decrease in sales when compared to last year may be interpreted negatively by some, this year is, in fact, shaping up to be just about average when you look at the trends over the past decade.
So far this year, our members have sold 20,785 new homes and condos all over the GTA. While that number is down from last year’s 24,107, it is an improvement over the 19,664 new homes sold in 2010 and a broader look shows that we are currently in line with the long-term average calculated over the last ten years.
By comparing a banner year like 2011 with an average year like 2012, it’s easy to wrongfully assume the worst. But it takes a look at the bigger picture to accurately assess the state that our market is currently in – stable and healthy.
Most importantly, our industry has found a way to meet increased demand while facing land supply shortages as a result of Ontario’s emphasis on intensification. “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,” BILD President and CEO Bryan Tuckey recently told the National Post. It’s also worth noting the extent to which the building of new homes will affect everyone. Our industry contributes to the economy by creating thousands of jobs and providing billions of dollars in wages, not to mention tax revenue for the municipalities, province and country.
So how did we manage to build the necessary 40,000+ homes each year despite restrictions when it comes to land use? Those following the trends over the last decade have no doubt noticed the shift from low-rise living to condominiums as a way of making up for the shortage in the low-rise market. The trends are continuing into 2012 with RealNet showing strong high-rise sales this June (the third highest on record) while the low-rise market has sunk to the lowest on record for that month.
The widening gap between high- and low-rise sales is evident throughout the RealNet report, particularity in the Q2 and year-to-date results. The second quarter saw high-rise salesgrow 51 per cent higher than the long-term average while low-rise numbers were 30 per cent less. The difference was less extreme in the year-to-date numbers, but still notable.
Another trend to keep an eye on this year is continued grown in the 905 condo market as the shift towards high-rise living spreads outwards from the city centre. New transportation corridors are paving the way for additional development outside of the City of Toronto, particularly in York Region, which has seen tremendous growth in the high-rise sector, most notably in Vaughan.