Zonda Urban's Q3-2024 survey
reveals a historic shift in the Greater
Toronto and Hamilton Area
multi-family housing market, as townhouse sales account for 56% of
transactions, overtaking the long-dominant condominium sector amid
a slowdown in demand.
TORONTO, Oct. 15,
2024 /PRNewswire-PRWeb/ -- For the first time in over
a decade, townhouse sales have taken the lead in the Greater Toronto and Hamilton Area (GTHA) multi-family market,
overtaking a stalled market for condominium apartments.
Demand for townhouses cannot compensate for
the gap left by an absent new condominium apartment market in the
GTHA.
"Developers of new condominium apartment sites have completely
pulled back," says Pauline Lierman,
Zonda Urban's vice president of
market research. "There is no incentive to launch into a market
where the demand isn't there, and unsold inventory is at a record
high of 22,388 units. Demand for townhouses cannot compensate for
the gap left by an absent new condominium apartment market in the
GTHA. Still, it can provide a 'Plan B' for diversified firms and
help on the supply front."
Zonda Urban's Q3-2024 GTHA
multi-family survey results show quarterly townhouse sales
accounted for the area's highest share of multi-family sales. Of
the 1,064 condominium apartments and townhouses sold in the
quarter, 56% were ground-related townhouses—meanwhile, only 465 new
condominium apartments sold in the quarter, a two-decade low for
the market.
Zonda Urban anticipates fewer
than 10 apartment projects to launch during the fall. In a more
robust market, as recently as 2020 and 2021, around 30 projects
would open for sales. Townhouse developers are showing a brighter
outlook—launches and new releases are ongoing and expected to
continue through the fall.
Total multi-family sales over the past 12 months have declined
43% with new condominium apartment sales down by 50% to 6,476 and a
marginal 14% decline in townhouse sales to 2,681 units.
Two new condominium apartment projects were launched during the
third quarter, and the market struggled to attract buyers to
sustain absorptions. Only 15% of 748 new units sold at an average
of $1,104 psf and a notably small
average size of 547 sf ($625,945
average price). In contrast, townhouse launches were steadier
during the usually slow summer months, with ten projects launching
and selling 50% of 442 units released at an average of $1.276 million ($611 psf) with an average unit size of 1,993
sf.
Over the next 15 months, the development industry will continue
to deliver many new condominium apartments with an additional
13,048 units in buildings expected to begin occupancy by the end of
2024, bringing annual condominium apartment completions to
29,414.
A further 34,000 units are slated for completion in 2025. The
long-term outlook after 2025 foresees a potential supply freefall,
with units estimated to be delivered in 2027 falling 50% compared
to 2025 and only 2,838 units estimated to be delivered in 2029.
These delivery estimates are contingent on a return of sales; of
the current 22,388 unsold new condominium apartment units in the
GTHA in Q3-2024, 62% were in pre-construction, with work on these
sites not yet having commenced.
Visit ZondaHome.com or follow us on LinkedIn for more
information.
About Zonda
Zonda provides data-driven housing market solutions to the
homebuilding industry. From builders to building product
manufacturers, mortgage clients, and multifamily executives, we
work hand-in-hand with our customers to streamline access to
housing data to empower smarter decisions. As a leading brand in
residential construction, our mission is to advance the home
building industry, because we believe better homes mean better
lives and stronger communities. Together, we are building the
future of housing.
Media Contact
Steve Ladurantaye, Zonda,
613-447-5649, sladurantaye@zondahome.com, www.zondahome.com
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SOURCE Zonda