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2016 a record breaker for GTA real estate

0 219 Economic

by DCN News Services

TORONTO—Altus Group Limited has released the results of its 2017 GTA Flash Report, which provides a review of the real estate market in the Greater Toronto Area (GTA) based on 2016 Altus Group data.
2016 a record breaker for GTA real estate

The report highlights a record-breaking year in the new home sector and also looks at the performance of commercial leasing, investment and land sectors within the GTA.

Investment property sales, including land sales, as well as sales of office, retail, industrial, hotel and rental apartment properties, reached a total of $17.2 billion in 2016, a 12-per-cent increase from 2015 and a record for the sixth consecutive year.

Residential land sales contributed a record $5.7 billion to the total, up $640 million over 2015.

Sales of rental apartment buildings were down 29 per cent in 2016, the only investment asset class to post a decline in dollar volumes.

In the leasing sector, the GTA-wide office vacancy rate only increased slightly in 2016, even with the completion of 11 new office buildings that added 3.2 million square feet of inventory.

The majority of the new office supply was in the downtown submarket, where the vacancy rate at the end of 2016 was 6.4 per cent, compared to 9.7 per cent overall for the GTA. For the new home sector, Altus Group's data shows that total new home sales in the GTA reached 47,161 units in 2016, up 12 per cent from 2015 and the highest level in 14 years.

New highrise units, primarily comprised of condominium apartments, accounted for 29,186, or 62 per cent of all new homes sold, a record number of transactions for this segment.

The report also indicates that the inventory of highrise units available to purchase declined substantially during the year. In addition, highrise completions in 2016 were just below 18,000 units, down from over 20,500 completed the previous year.

New low-rise sales volume saw a decline for the first time in two years to 17,975 units.

This drop was mainly comprised of single-detached and semi-detached units while townhouses saw a modest increase from 2015.

The report highlights that a lack of inventory hindered this sector with data indicating that less than 1,900 units were available for purchase at the end of December 2016, which is extremely low compared to historical numbers.

At the end of 2016, the average price of available low-rise homes reached $995,116, up 20 per cent from the same period in 2015. By comparison, the average price for an available highrise unit in the GTA was $507,128, up 12 per cent year-over-year.

Total GTA investment property sales volumes were split about equally between the City of Toronto and the 905 regions.

Altus Group is a provider of commercial real estate services, software and data packages. The report was released late last month.

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