Nearly Half Of GTHA New Condo Sales Are Discounted Bulk Deals
Toronto-area new condo sales are rising again, but nearly half of the buyers helping drive the recovery are investment groups purchasing blocks of completed units at steep discounts.
Investment groups acquired 339 condos through bulk transactions across the Greater Toronto and Hamilton Area during the third quarter, accounting for 45% of the 760 new condos sold, according to Urbanation.
Those bulk deals closed at an average $763 per SF, a 40% discount to the original selling prices for units in the same buildings.
The transactions helped new condo sales double from a year earlier, marking a second consecutive quarter of growth. But overall sales remained 78% below the 10-year average for third quarters.
The activity is also increasingly concentrated in finished buildings. A record 648 completed units sold during the quarter, representing 85% of all new condo sales. Pre-construction sales fell 61% to just 60 units.
The bulk buying is beginning to clear some of the market’s backlog. Completed and unsold inventory declined 7% from the previous quarter to 5,127 units, its first quarterly drop in four years.
But development activity continues to collapse. Just 381 condos started construction during the quarter, while units under construction fell 38% year over year to 35,920, the lowest level since 2012.
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Remax Real Estate Professionals
Re/Max Real Estate Professionals
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Jared Ennis
Central CA Commercial | California
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Rick Recckio
Recckio Real Estate & Development
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Greg Corbin
Northgate Real Estate Group
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Essex Property Trust, Inc.
California
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Josh A
California
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Bob Tuteur
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Andrew Schildcrout