New Condo Sales Back From The Dead
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After nearly a year of massive declines in sales and stagnant or falling prices, it seems that new condos are back. Urbanation’s sales figures for Q2 2009 show a dramatic change from Q1. We aren’t back to the hedy days of 2007-2008, but 2963 units sold sounds a heck of a lot healthier than the paltry 917 sold in Q1. Still, the numbers are 40% below Q2 2008 when 4,962 new condos were sold.
In the past 3 months, I’ve personally been involved with 3 major new condo launches or relaunches: FLY, One Cole, and Liberty Market Lofts. All three saw sales in the hundreds of units in a just a matter of 2 or 3 days. This was the norm back in 2007-2008, where new condos were launching every week and if they weren’t quick to raise their prices after initial launch they would sell out faster than you can say ‘economic collapse’.
Now some developers are starting to do something I wouldn’t have predicted just 3 months ago: raise prices. Check out one of Brad Lamb’s recent ‘tweets‘. And all this is taking place concurrently with the resurgence of the resale market. It seems that the lack of inventory in the resale market and elevating prices have people once again looking at new developments as a viable alternative. More bodies in the new condo sales centres of late has developers thinking less about lowering prices and more about raising them.
The focus now for buyers is ‘where can I get the best price, the best value for my investment long term’. No longer are they swayed by frilly incentives like free maintenance fees or low interest rates. Buyers are returning to the price per square foot equation as the best predictor for long-term ROI.
Still, there are more shoes to drop. More condo projects will be axed or relaunched in the coming months. I expect an active fall for the new condo market and more opportunities for buyers and investors to come.