There are many varying opinions regarding the oversupply problem in Toronto. Is there one? Isn’t there one? It seems that it depends on who you ask. But, Macleans has put together stats and figures that make the Toronto oversupply problem fairly hard to deny.
First, a look at the number of housing starts and sales in the Toronto area.
It’s clear that August was one of the worst Toronto has experienced in recent history. Residential sales were down by 13 per cent, while the super hot condo market saw sales fall by 22 per cent. Some were encouraged by the fact that resale prices were up, on average; but it also needs to be noted that condo prices fell 4 per cent, year-over-year in the city of Toronto.
What might be even more discouraging might be the fact that, at a time when sales were at their lowest, construction and starts were at some of their highest. Resales were also down in Toronto over the month of August by 13 per cent, showing that there just aren’t as many people out on the market – especially those that want to buy someone else’s home. And why would they? Housing starts for single-family homes jumped by an incredible 72 per cent; while the condo market saw an even bigger increase at 108 per cent. And this at a time when the market can barely afford it.
But what about the downtown core? The area of the city that just about everyone relies on to keep the market afloat? Unfortunately, things look bleak here as well. While condo prices were at an all-time high during the spring of this year, they quickly plunged. And unfortunately, that’s a trend that’s likely to continue. Compared with August of last year, condo sales dropped by 35 per cent in August of 2012, the lowest they’ve been since 2008.
New listings on condos were also up 25 per cent in August compared with August of 2011. And the inventory on the market is at the highest level its ever seen.
Yes, it certainly is becoming harder to deny that there’s an oversupply problem in Toronto. But Toronto isn’t the only city dealing with a massive amount of overstock and high prices. Come back tomorrow when we’ll look at the Canadian market that’s perhaps seen the most extremes over a one-year period: the one in Vancouver.
