Last year saw a tremendous return to form for Toronto’s pre-construction market, with growing buyer and investor confidence working synergistically alongside the release of many awaited projects. The resilience of the city’s real estate market proved to be extraordinarily robust as 2021 saw not only a record number of launches (12,755 units throughout the GTA) but a record number of sales (increasing by 70% from 2020) as well.
Providing unique insider insights into the new, shifting landscape of the 2021 market, Austin Birch, Toronto’s strategic pre-construction partner of choice, released The Austin Birch Report. Through this, the marketing team shared powerful industry forecasts to help drive informed decision-making at a time when many were uncertain of what the future held.
In preparation for the 2022 market, Austin Birch will release their latest volume of The Austin Birch Report. This publication will unveil unique insights informed by the company’s expansive network, frontline experience and unparalleled industry knowledge, diving into the state of the market and offering a view of what we can expect for this year.
The report shows evidence of another incredible year of growth, contemplating new, noteworthy changes in the industry that will affect construction requirements as well as evolving buyer habits. We’re going to provide a preview of some of the most interesting finds today but, if you would like an in-depth look, simply signup for The Austin Birch Report at austinbirch.com.
Another record-breaking condo year for Toronto
Looking at the Toronto market, Austin Birch is anticipating another record-breaking condo year for 2022. They note that a growing number of co-operating agents are moving from a resale focus to a pre-construction focus, with many newly licensed agents solely choosing to concentrate on pre-construction.
This may come as no surprise as freehold inventory hit a record low of 1,448 units (the lowest level since December 1999), driving the price of freehold housing up even further, expanding the gap for many buyers. As such, Austin Birch sees a clear indication that the GTA condo market outside of the core will continue to perform well because their price points allow additional buyers to enter the market.
Also, despite an 18% year-over-year increase in average sale price, buyer interest in the city core has not waned. Austin Birch expands on this, stating that although a rise in interest rates may slow pre-construction purchases, the effect will be minimal and should not stop bounce-back to the financial business core. Generally, because suite sizes are smaller, the price points will remain approachable for many investors in spite of inflation.
This holds true for the record number of immigrants that have been arriving in Canada as well. Although many believe these increases will dissuade newcomers, many immigrants come to Canada for a better life and consider the long-term potential that life in Canada provides a strong enough counter to any ill-effects of price and interest rate increases.
In fact, with the increase in immigration and the apparent downswing of the Omicron Variant, rental numbers are experiencing a strong surge, and the market has settled down to pre-pandemic vacancy levels of below 2%. With an increasingly vaccinated population and seemingly less severe variant strains, the economy seems ready to get back to transacting as normal.
Record number of suites coming to market
Looking to the future, Austin Birch assesses new pre-construction requirements coming to Toronto and the effect they will have on the market – predicting that even further growth will come from these changes.
With the city’s Inclusionary Zoning Policy coming into effect soon, there will be many developers moving ahead speedily to get their sites zoned before the deadline. This, in turn, will lead to a record number of suites coming to market.
A particularly interesting point of discussion explores the minimum size requirement for two- and three-bedroom suites. As more and more families begin looking to condominium life as an alternative to the expensive freehold market, Austin Birch expects to see significant attention placed on this buyer group.
The company also notes that developers are further reducing the number of parking spaces in new projects due to reduced demand, smaller units, and the city reducing the required number of spots a developer needs to provide. This is viewed as an essential change, as owning a car will likely become more of a luxury than a necessity over the next decade, with many commuters looking to public transit or Uber-like services.
With all these different factors considered, Austin Birch anticipates that 2022 will experience the highest number of pre-construction suites sold in a single year on record, despite the likelihood of raising interest rates. Their insights go on to suggest that sales numbers will likely remain even throughout the GTA as the market in the core has completely rebounded, and buyers are absorbing projects with pre-pandemic sales velocity.
Austin Birch’s mission is to enable their clients to do what they do best: develop superb real estate. Austin Birch handles the rest, with an innovative hands-on approach that encompasses the entire sales and marketing process; helping developers release projects in truly unique ways. Austin Birch understands how crucial a custom strategy is to success and therefore has developed a highly attuned methodology that guides Toronto and GTA clients through every step of their unprecedented process. Discover how to unlock your project’s full potential with Austin Birch. Unthink the norm, Unthink Real Estate.
Sign up to discover one-of-a-kind insider insights available only in The Austin Birch Report at austinbirch.com.