In the battle for the real estate dollar, condo apartments and stacked townhomes are winning. According to the Toronto Real Estate Board and BILD, high-rise and mid-rise apartments and stacked townhouses represented 86 per cent of new-construction home sales in the GTA in May, as the cost of a new townhouse crossed the $1 million mark for the first time.
Condos comprised 75 per cent of new-construction home sales this year to date.
Prices for new single-family homes rose approximately $10,000 in May (from April). The average price is now $1.2 million, a whopping 40% gain over one year ago. The average condo price rose to $604,683 representing a 33% rise over last year.
Not too many investments earn that kind of dividend!
The statistics reveal a trend that our industry should note. According to Ipsos research the number of first time buyers in May 2017 is down to 40%. One year ago, 53% of all new real estate in the GTA was purchased by first time buyers.
So what does it mean? Well clearly a good 13% of first time buyers have been priced out of the market or have chosen to take a wait and see approach. Many are expecting prices to cool as a result of the government’s Fair Housing Policy instituted in April.
Selling the dream of home ownership to first timers is going to take strategic marketing. With such a significant drop in virgin purchasers, we have to re-energize the process and create a “buy now or never” selling platform that will use escalating prices as an impetus to buy before ownership becomes totally out of reach.
The brains at 52 are huddled together as we speak, creating marketing strategies and creative ideas to overcome this blip in the graph. Stay tuned!