If you’ve been watching the Etobicoke South area over the past few years, you may have noticed a number of articles that countered the claims of many that there was an oversupply of condos looming in the Toronto area. In fact, our position has consistently been that there was and is no condo oversupply and instead increasingly tighter supply conditions and higher prices.
The Financial Post recently reported that “homeowners in Canada’s largest city are facing rapidly rising prices for low rise housing which are driving up demand in Toronto’s condominium market.” Unsold inventory is now at its lowest level since 2010 and, with only 6.8 months of supply available, at a decade-low for inventory.
The impact of reduced supply hasn’t yet translated into sharp price increases, with the average index selling price for new condo apartments up only 2% from a year ago to $582 per square foot.
However, this could change in the near future. “With demand for condos in the GTA pressing forward strongly, new projects are being challenged to enter the market in greater volume. Should current conditions persist, price pressures for high-rise units can be expected to build, particularly as low-rise housing remains afflicted by record-low supply,” said Shaun Hildebrand, senior vice-president at Urbanation.
“Similar to the low-rise market segments, we have seen growth in condo sales outstrip growth in condo listings this year. This is why we are seeing average price growth well-above the rate of inflation,” said Jason Mercer, TREB’s Director of Market Analysis.
ETOBICOKE’S CONDO BOOM DEPLETING QUICK
The Etobicoke Waterfront condo market is also witnessing the impact of the overall market tightening. While this area has enjoyed relatively high choice options in the past because of the high clustering of projects and development, it is also becoming more limited by the month. Moreover, it is important to note that most of the available supply is in projects that are near the waterfront, but not necessarily right on the waterfront, as is the case with Eau Du Soleil. Over half of the available units in the market are contained in two projects that are located north of Lakeshore on Park Lawn Road, not directly on the waterfront.
Of the 14 buildings in the Humber Bay Shores sub-market, just eight are true waterfront projects, with just four buildings having meaningful supply available for sale: The Cove (64 units); Jade (21 units); EDS Sky Tower (58 units) and EDS Water Tower (45 units).
Perhaps most notable is the fact that of these true waterfront projects, Eau Du Soleil showed the highest quarterly sales totals in the local market (47 sales, respectively). Though EDS has more unit selection than the other alternatives in the area, the pace of sales indicates this won’t be the case for long. There is only a 6-8 month supply of suites remaining.
WHAT DOES THIS MEAN FOR HOMEOWNERS?
If you are looking to buy, buy now. Waiting will get you nothing more than less choice and higher prices. If you are considering the Etobicoke Waterfront, now is quickly becoming not soon enough. Supply is starting to deplete rapidly, especially for suites with good views and spacious balconies and terraces. Eau Du Soleil Terrace Suites are a rare opportunity, in a market where even “run of the mill” choices are getting slim.
Gary Mcilravey is Manager, Market Research at Empire Communities. Gary has over 25 years experience working in the Toronto and across the southern Ontario housing market. Prior to joining Empire, Garys’ experience includes many years as Vice-President of a leading Toronto research and consulting firm, then principal of his own research firm, followed by over 15 years working in the “front lines”, as the marketing and sales director with three different building corporations, spanning both the high rise and low rise sectors. Gary’s rare combination of substantial academic and business research experience, combined with ground level experience as a marketer of many new home communities, from start to completion, provides him with a unique and long-term perspective on the southern Ontario housing market.