TORONTO — Toronto-based Altus Group has released a real estate report for 2017 that concludes the year was record breaking for total investment property sales volumes in the Toronto area.
The 2018 GTA Flash Report, which provides a review of the real estate market in the Greater Toronto Area based on 2017 Altus Group data, was released late last month, a statement said.
Investment property sales, including land sales, as well as sales of office, retail, industrial, hotel and rental apartment properties, reached a total of $23.5 billion in 2017, a 38-per-cent increase from 2016 and a record for the seventh straight year. Residential land sales contributed a record $8.5 billion to the total, up $2.8 billion over 2016.
In the office leasing sector, the Greater Toronto Area (GTA)-wide office vacancy rate fell in 2017 to 8.9 per cent, including vacant but leased space, despite the completion of 13 new office buildings that have added two million square feet of inventory. Most of the new office supply under construction is in the downtown Toronto market, where the vacancy rate at the end of 2017 was below six per cent.
The data shows that total new home sales in the GTA reached just over 44,000 units in 2017, the fourth highest level on record. New condominium apartment sales, which includes apartments in low, medium and highrise buildings, lofts and stacked townhouses, surpassed the previous annual record set in 2016 with just over 36,400 units sold in 2017.
But new single-family home sales, including detached, link, semi-detached and traditional townhouse units, fell by 58 per cent.
New condominium apartment inventory at the end of 2017 represented less than three months of supply, based on the monthly pace of sales over the previous 12 months. Average asking prices for available new condominium apartments increased rapidly during 2017, with the December average up 41 per cent compared to the previous year, at just over $716,000.
Key predictions for 2018 highlighted in the statement include:
- Office shared work spaces: The trend of renting workstations within a larger office space will grow in the GTA as low vacancy rates lead to higher rents. Look for this segment to grow not just in the downtown market but throughout the GTA, as employers look to accommodate staff pushed further out in search of more affordable housing options.
- Land sales: Residential land sales are expected to be strong in 2018, although higher prices and various policy changes have introduced more uncertainty to the land market.
- Condo market: New condominium apartment sales are expected to remain elevated in 2018. However, surpassing 2017 levels will be a challenge.
- Industrial: Demand for industrial space will remain strong as online and traditional retailers seek warehouse space to support their e-commerce business strategies.
- Investment property: Investor appetite will remain strong in 2018.