While we’re into the last month of the year, BILD is waiting on two months of data from RealNet to close the books on 2010.
With nearly 31,000 new home sales logged so far, and with every expectation that November and December will prove to be very strong months, particularly for high-rise, I am projecting 36,000 new home sales for the GTA for 2010.
When the final numbers are in and we look back on 2010, three trends should stand out. The first is the condo craze. Within the last decade, the share of the GTA housing market captured by high-rise has risen steadily from one quarter, which was considered normal, to a third, which was called the new normal, to more than 40 per cent (we called that The Year of the Condo), to the point today where more than half of all new home sales annually are high-rise condos.
Secondly, the shift in high-rise sales to the 905 Regions began in earnest this year. We’re seeing more high-rise condo projects in Oakville, Brampton, Vaughan, Richmond Hill and Pickering and way more high-rise communities in Mississauga and Markham. Although we will continue to see the preponderance of condo activity in the City of Toronto, the 905 high-rise trend is definitely the way of the future under the Greater Golden Horseshoe Growth Plan.
The third thing that will stand out loud and clear, and this point goes a long way towards explaining the first two, is the price escalation in low-rise, 905 area homes, with the RealNet price index breaking the half-million dollar threshold ($500,532) for the first-time ever just last month. Everything you learned in Economics 101 applies here – the high demand for the very low supply of low-rise housing has created disequilibrium in the market. I’ll have more to say on that in the coming weeks.