GTA condo sales climb 24% to record in 2011

A record 28,190 condos were sold across the GTA last year, up 24 per cent from the previous high set in 2007, says condo research firm Urbanation.

While sales remained sky-high in the final quarter of 2011, at a record 7,226 units, the inventory of unsold suites has been creeping up. As of the end of last year, it stood at just under 15,000 units — about 18 per cent of existing condos — up from 12,272 in the first quarter of 2011, Urbanation notes in its second annual report on the state of the GTA condo industry.

That’s still below the five-year 21 per cent average for unsold suites.

“The more successful the condominium market is in Toronto, the more reports surface warning of oversupply or a correction in prices,” said Ben Myers, executive vice-president of the condo tracking company.

Myers points to speculative buying, over-leveraging and “herd behaviour” as three risk factors that are hard to assess but could lead to a correction in Toronto condo prices.

But he notes that so far there seems to have been very little “dumping” — or flipping — of units for a quick profit before move-in day, which suggests most purchasers are likely “long-term, hold-and-rent investors” who are boosting the much-needed supply of rental accommodation in the GTA.

Urbanation predicts the market will remain strong this year, although it will revert to more normal sales levels of 20,000 or so units.