Are New Condo Sales Going to Fall in 2018?
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Okay, this article is from Bloomberg, and the headline is New Condo Sales In Toronto Set To Fall After Record High Year. New condo sales in Toronto set to fall, so you’re gonna be hearing a lot of this this year, headlines and people talking about the condo market falling. What they mean is that the number of new condo sales expected his year, and probably will happen this year is going to be less than in 2017.
Is this cause for concern, should we be worried, does this mean that the market is dropping? No, in a word, no. This is just simply a reflection of the fact that 2017 was an all time record high. 35,000 new condos were sold in 2017, so there’s no way we’re gonna do that again back to back years. The massive numbers of new projects were launched, big projects with hundreds and hundreds of units in them. We don’t have that same number of projects and number of units in the pipeline that are even able to launch this year.
I’ve been talking to many developers already this year, so far in 2018 who are telling me their projects that they had slated to launch in 2018, they’re already pushing them into 2019 because the development cycle is taking longer and longer and longer. Getting approvals, getting zoning, going through the OMB, which OMB doesn’t even exist anymore, all these things are contributing to longer and longer and longer wait times for developers from the time they purchase a piece of property to the time they can actually put it up for sale. This is also exasperating the supply problem in the city and the reason why condo prices keep going up is because we don’t have enough new supply and the new supply that wants to come into the marketplace, it can’t. It’s taking longer and longer to do so.
That’s something to watch for in 2018.