TORONTO (February 12, 2018) – Altus Group Limited (“Altus Group”) (TSX: AIF), a leading provider of commercial real estate services, software and data solutions, today released the latest numbers on new condominium apartment sales in key markets across Canada for 2017. The data provides insight into new condominium apartment sales, inventory and pricing in the Greater Toronto Area (“GTA”), other areas of the Greater Golden Horseshoe (“GGH”), Edmonton, Calgary and Vancouver.
In 2017, the GTA was by far the hottest market in the country for new condominium apartments with a record 36,429 units sold. The market saw the largest increase in buying activity across Canada with 7,297 more units sold than the previous year, up by 25%. Despite an increase in the number of new units brought to market by developers in 2017, the pace of sales exceeded the new supply. As a result, available inventory declined to its lowest level since Altus Group has been tracking the market, which prompted rapidly rising prices.
Other areas of the GGH also saw strong sales in 2017 with a combined 3,467 new condominium units sold last year, although the total was down 8% from a buoyant 2016. Hamilton and Kitchener-Waterloo remain the two largest new condominium apartment markets in the GGH regions surrounding the GTA with 783 and 1,257 units sold, respectively.
New condominium apartment sales in Edmonton grew over 60% in 2017, the largest percentage growth of the markets tracked, with 1,289 units sold last year. This significant increase was connected to the downtown condo market where the new Rogers Centre attracted buyers to the city’s core, with sales increasing by 160% year over year. The suburban areas of Edmonton were still dealing with a large supply of inventory and sales were relatively flat compared to 2016.
The recovery of new condominium apartment sales in Alberta was also seen in Calgary, which saw 2,083 new condo units sold last year, increasing by 42% from 2016. After a two-year downturn, buyers are returning to the market but unlike in Edmonton, it was the suburban areas, rather than the downtown core, that saw the stronger increases.
While other key markets in the Altus Group data saw sales in the new condo market either exceed or fall just slightly below their 2016 levels, Vancouver was an outlier last year with a marked decline in overall unit sales, impacted by the sharp drop in new condominium supply coming onto the market. However, the 10,939 units sold in 2017 represent a remarkable 90% sales rate of all new inventory introduced into the market in 2017. Vancouver is the tightest new condominium apartment market in the country and sales levels are not reflective of underlying demand, which remains very strong.
“The sales activity across the country indicates that demand for new condominium apartment product was very strong in 2017, but particularly in the GTA,” said Matthew Boukall, Senior Director at Altus Group. “While we expect to see some moderation in the GTA sales volumes in 2018 given price escalation in recent years, rising interest rates, tighter lending criteria and additional mortgage stress testing, strong demand in Vancouver and Calgary is expected to push new condominium apartment sales higher provided a broader range of affordable product can be brought to market.”
Altus Group took a deeper look into the 2017 figures to compare what buyers with a budget of CAD $500,000 could afford in the downtown areas of the various markets across Canada. Comparing the pricing of available new condominium apartment units found that consumers have considerably more buying power in smaller markets such as Calgary, Edmonton and Kitchener versus the two largest markets, Vancouver and Toronto.
- In the GGH, a buyer could find two bedroom units over 1,000 sq.ft. near the downtown of Kitchener that could be appealing to those willing to go outside of the GTA in search of affordability.
- Calgary and Edmonton buyers could also find two bedroom units between 850-1,000 sq.ft. in high-rise buildings in desirable areas near the core.
- In the Toronto market, buyers would have to settle for a one-bedroom unit with only 430 sq.ft., or approximately half the space of the other markets.
- In downtown Vancouver, we were unable to find any new condominium apartment units offered for $500,000 or less. In fact, buyers would need to go into nearby markets like Burnaby to find projects offering one bedroom units at this price point.
For more information, please visit datasolutions.altusgroup.com.
About 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. Our businesses, Altus Analytics and Altus Expert Services, reflect decades of experience, a range of expertise, and technology-enabled capabilities. Our solutions empower clients to analyze, gain insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,500 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. Altus Group pays a quarterly dividend of $0.15 per share and our shares are traded on the TSX under the symbol AIF.
For more information on Altus Group, please visit: www.altusgroup.com.