Could this be the beginning of the forecasted "soft landing?" Developers appear to be a little less eager to scoop up land in the Toronto area to build condos on, reports The Globe and Mail.
If that keeps up, it would be good news for those economists and market watchers who believe that too many condos are going up in the country’s most populous city (in the last year the central bank has highlighted the potential risks that the rising supply of condos poses to Canada’s housing market and broader economy).
The price that developers paid for land to build condos on softened by 4 per cent in the first three months of this year, to $55 per square foot, according to RealNet Canada Inc. (the price was closer to $30 per square foot in 2005 and 2006).
The total volume of residential land (for both condos and houses) that was bought during the first quarter of this year fell to $539-million, the first sign of a retreat after last year’s rally.
The news follows a Conference Board of Canada report -- published in early April -- that predicted a soft condo landing.
“We see a soft landing even in areas of higher risk, like Toronto. Granted, there are many condominium units under construction in Toronto, but not all will be completed at once, and the rental market, for which many are headed, is tight,” the report stated. “The city has a decent economy and strong population growth.”
by Jamie Henry
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