Altus Group Releases Results of 2015 Real Estate Review
Significant New Home Sales and Residential Land Transactions Demonstrate Industry Confidence; Strong Sales Activity and Buoyant Pricing Due to Lingering Pent Up Demand
TORONTO (January 29, 2016) – Altus Group Limited (ʺAltus Groupʺ) (TSX: AIF), a leading provider of commercial real estate services, software and data solutions, today released results of its 2015 Real Estate Review (the “Review”) of the GTA’s 2015 new home market. The Review indicates a resilient housing market that includes new record highs for both low and high density residential land sales, strong price increases (especially for low rise homes) and strong sales overall, despite an environment of modestly elevated high rise completions.
In 2015, residential land transactions in the GTA grew by 49%, to a record $4.2 billion. Specifically, low and high density residential oriented investments achieved record highs of $1.7 billion each suggesting, “continued levels of strong industry confidence in the prospects for residential development,” according to Altus Group’s Vice President and Chief Economist, Peter Norman.
“Altus Group’s review of the GTA’s commercial and residential real estate markets speaks to a mature market that continues to grow,” adds Peter Norman. “While the overall Canadian economy faces headwinds, the GTA economy is picking up steam and this is clearly reflected by the 2015 data on residential land sales, low and high rise new home sales and, of course, in the level of resulting construction.”
Peter Norman further states that the low rise sector, in particular, is, “one to watch for 2016 as new development lands come on stream, sales pick up and single-family housing starts continue to recover from a long drought.”
Low rise new homes sales continue to rise, up 8% over last year. In 2015, 19,637 low rise sales were recorded, approximately 15% higher than the 10 year average, while the annual sales totals were the third highest over the last decade.
At the end of 2015, the average low rise sale fetched $829,766 up 18% from the same period in 2014. By contrast, the average price for a high rise home in the GTA was $453,083, essentially unchanged from a year earlier.
“It’s not surprising, given the continued degree of pent-up demand for low rise homes in the GTA, and the still-tight conditions on residential land, that the new home price index continued to climb in 2015,” says Peter Norman. “A widening gap between the growth in low rise home prices and high rise home prices is further evidence of this trend.”
While high rise homes remain significantly more affordable, the high rise market saw a slight reduction of 2% in total sales, year over year. Despite this small reduction in total sales, the high rise market still managed to sell 21,658 units in 2015, the fourth highest number of annual sales in the last decade.
“What’s most fascinating about the sustained energy of the high rise market is that it was achieved while the industry delivered the second highest number of completions in the last decade,” says Peter Norman. Down from last year’s 24,426 completions, the market delivered 20,625 high rise units in 2015.
The positive sales results for both low and high rise homes has encouraged ground related land prices to remain level with previous years. In the GTA, low density oriented sites averaged $812,345 per acre in 2015, while medium density or townhouse oriented development sites were down slightly from the record levels in 2014, with a price per acre averaging $1,834,818.
These results were previously released under the REALNET® Canada name, whose independent and comprehensive data, analyses and insights on the commercial real estate investment and residential development markets is collected and compiled using a nationally consistent research process established in 1995. Going forward they will be released by Altus Group, powered by a proprietary data platform led by Altus Data Solutions Canada. This teamis the formal unification of leading Canadian real estate data companies previously acquired by Altus Group, including REALNET® Canada.
Altus Group Limited
Altus Group Limited is a leading provider of independent advisory services, software, and data solutions to the global commercial real estate industry. All of our five core practices – Research, Valuation and Advisory, ARGUS Software, Property Tax Consulting, Cost Consulting and Project Management, and Geomatics – embody and reflect decades of experience, a broad range of expertise and leading edge technology. Our offerings empower clients to analyze, gain insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,300 employees around the world, with operations in North America, Europe and Asia Pacific. Our clients include some of the world’s largest real estate industry participants, spread across a broad variety of sectors. Altus Group pays a quarterly dividend of $0.15 per share and our securities are traded on the TSX under the symbols AIF and AIF.DB.A.
For more information on Altus Group, please visit: www.altusgroup.com.