Condo craze heading skyward
April building permits jumped by 24 per cent to $1.26 billion in Toronto area, StatsCan says
Toronto's love affair with new condominium housing doesn't seem to be waning.If anything, despite warnings from some analysts that the market has peaked and the sector may be overbuilt, recent figures show the attraction seems to be more intense.
April building permits were up by 24 per cent in the Toronto area to $1.26 billion, according to Statistics Canada figures released yesterday.
Virtually all the gain – the second highest since December of 2005 was due to multiple unit dwellings such as condominiums, according to Statistics Canada.
"The largest increase was in Toronto, where an increase in permits for multi-family dwellings more than offset a decline in intentions for single-family dwellings," said the federal agency.
Toronto was well above the national figure of a 14.5 per cent increase in building permits to a total of $6.4 billion in construction plans. Even then, economists were expecting it to be a flat month nationally.
"We were expecting a much more subdued month, so this handily toppled market expectations," said Royal Bank economist Rishi Sondhi.
According to Toronto condominium analysts Urbanation, 3,433 condominium sales were registered in the first quarter of the year, only eight units below the first quarter of 2007, which was part of a record year. However, resales condominiums – which are of less interest to investors who may want to flip the units – are down by 6 per cent in the first quarter of the year compared to last.
The hottest area remains the old city of Toronto, accounting for 50 per cent of all development activity.
Those sales are being spread across more projects, however. There are 277 condominium projects in the Toronto area market, 56 more than in the first quarter of last year.
From The Toronto Star, June 6, 2008
Tony Wong
BUSINESS REPORTER
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