After a three-year non-stop party, Toronto’s condo market is likely to settle down in 2019, some of the city’s biggest developers say.
“I can’t, for a minute, imagine that we’re going to continue to see the increases that we’ve experienced,” said Jim Ritchie, executive vice president of sales and marketing at Tridel. “Do I think there’s still room for growth? Yes, but not what we’ve seen in the past three years.”
Ritchie joined representatives from Menkes Developments Ltd., CentreCourt Inc. and Diamond Kilmer Developments for a round table discussion at Bloomberg’s Toronto offices on the outlook for the city’s condo market last week. Together, the closely held companies have built more than 100,000 condo units, including Menkes’ Harbour Plaza and Tridel’s Ten York by the waterfront.
Toronto condo prices have surged 50 per cent in the past three years to a record high of $570,764 ($425,000 U.S.) in September, according to research firm Urbanation Inc. The segment soared amid the housing frenzy in the first half of 2017. While price gains have eased since then, they remain buoyant compared with the single-home segment which has been hit by harsher mortgage lending rules and rising interest rates.
“We have hit the peak and I think prices will probably stay flat, for, I would even say the next two years,” said Jane Renwick, vice president of marketing and sales at Diamond Kilmer Developments, a joint venture between Diamond Corp. and Kilmer Brownfield Equity Fund. The group is developing its first project of about 250,000 square feet of housing in midrise condos and townhouses that will include a mix of market and affordable units.
Shamez Virani, president at CentreCourt, added: “There is, for the first time in a little while, at least in the last 24 months, signs of resistance, signs of certain projects not being able to break barriers on pricing.”