Lisa Van de Ven: More boomers to buy condos
The year 2010 ended on a high note for Toronto’s condo market, according to statistics released in January by Urbanation. The fourth quarter of the year (October to December 2010) showed 6,280 new condominium sales, up from 3,805 in the quarter before.
“There was a huge jump in sales and that was directly relatable to the fact that we had 29 new projects and 6,500 units that launched in the fourth quarter,” says Ben Myers, executive vice-president and editor of Urbanation, which tracks the Toronto condominium market. “A lot of those were large-scale projects and a lot of them did fairly well.”
Investors are continuing to drive the market, he says, making “the bulk of the sales” for newly released condo projects before sites even have their grand openings to the public. But once that surge of sales is over, end users are the prime buyers; Urbanation tracks those existing new projects already on the market, too, where sales continue at the same average pace as they have for the past five to six years. “For the end users, that level hasn’t changed, just the level of investor activity has improved,” Mr. Myers says.
With a 7% to 9% increase annually in the price per square foot of condos in the city, it’s no wonder investors are continuing to buy. Price per square foot rose from $352 in the fourth quarter of 2009 to $374 per square foot in the fourth quarter of 2010. “Increases like that provide investors with returns,” Mr. Myers says.
While investors may be looking for returns, another buyer group — baby boomers — is considering something else: condo lifestyle. A certain segment of boomers is starting to see condos as a viable option, according to a recent report by TD Canada Trust, which tracked housing trends among boomers throughout Canada. The TD Canada Trust Boomer Buyers Report showed that while 61% of the boomers surveyed planned to look for a detached house with their next move, the next largest segment of the population — 24% — were looking at condos, citing the lack of maintenance, better security and amenities as deciding factors.
“We’ve seen so many condo developments, especially in Toronto, that you’re at least seeing these boomers talking about condos, where in the past they haven’t at all talked about them,” says Farhaneh Haque, regional sales manager for the Mobile Mortgage Specialist area of TD Canada Trust. (Not that all of the boomers surveyed were convinced: 61% didn’t like the idea of living in a condo because they didn’t want to give up their backyard or garden, and 57% didn’t want to pay condo fees.)
So what does 2011 promise? According to Mr. Myers, Toronto can expect a slowdown compared to 2010 numbers — although with the 16,000 new condo sales he predicts within the city limits this year, sales certainly won’t stop completely. “I still think it’s going to be a pretty solid year,” he says. “Based on quarter four, we may even have higher results than the 16,000 — but I’ll stick to my prediction for now.”
From the National Post - Lisa Van de Ven