GTA New Home Sales – January 2013

Here are the numbers for January 2013 new home sales in the GTA.

High Rise: 686 sales; down -8% from Jan. 2012

Low Rise: 562 sales; down -52% from Jan. 2012

Total New Homes: 1,248 sales; down -35% from Jan. 2012

january historical nh sales jan13

More numbers soon…..

Posted in GTA NH

GTA Condo – Building Size Part 2 (Height)

So based on Total Units we showed an increasing number of larger condo projects being launched but also a decreasing average size – ie lots of smaller building too.

Now what about building height? Lots of new skyscrapers out there but lets get some perspective by looking at all of the data.

Looking at the building height (storeys) in new project openings by quarter since 2000 we get the following chart. Each circle represents a new condo project corresponding to its Opening Date (x-axis) and the Building Height in storeys (y-axis) with the colour representing the current Construction Status.

building size by height

As illustrated above, 2012 had more new project openings of buildings greater than or equal to 40 storeys than any previous year with 14 projects. The previous record was the 12 projects greater than 40 storeys that launched in 2011. Before that 9 projects of that building height launched in 2010, 2008, and in 2007.

In general there was a big step up in the number of new project launches with buildings greater than or equal to 40 storeys beginning in 2005 when there were 8 such projects. Previous to that, 3 projects in one year was the most.

The most drastic changes year over year belong to the number of projects greater than or equal to 60 storeys. Prior to 2012 there had never been more than 1 of these projects opening in a given year, and in total there were only 5. But in 2012 alone there were 4 new projects launched of 60 storeys or grater.

As with Total Units, the projects with Building Heights at the top end are getting more plentiful but on average 2012 saw the lowest average Building Height (15.9 storeys) since 2009 (which was a bit of an odd year for new releases) and 2004 before that.

So we’re getting more larger buildings (units and storeys) as well as more smaller buildings (units and storeys). This seems to play into the dual market make-up of the new home condo market – part investor and part owner-occupier – each with different preferences and buying habits. This “Tale of Two Markets” was also considered here .

The next step is to further segment the smaller building universe to see if there are changes there that might indicate more of an evolving owner occupier market. Stay tuned… And you can get email notification of new posts by clicking on the “sign me up” button in the right margin.

Posted in GTA NH

GTA Condo – Building Size (Total Units)

We’ve often shown data related to the shrinking size of condo units over the last couple of years but we have not looked at what’s happening with overall condo building size.

I think, based on anecdotal evidence around us, we’ve assumed that building sizes were getting bigger over the last several years – which would be both right, and wrong.

Here’s what the data says:

If we look at the total number of units in new project openings by quarter since 2000 we get the following chart. Each circle represents a new condo project corresponding to its Opening Date (x-axis) and the total number of units in that project (y-axis) and the colour represents the current construction status.

building size by total units

As we can see, the number of new projects with more than 500 units has been increasing over time. Before 2008, the most new project launches with greater than 500 units occurred in 2003 with 4 projects exceeding that size. Then in 2008 we saw 7 projects launched with greater than 500 units, followed by 9 projects in 2012.

So the frequency of larger projects is increasing but if we look at the average number of units per project for each year we see that 2012 had the lowest average (197 units) since 2004. And for the years between 2004 and 2012 average project size fluctuated between a low of 206 units (2006) and 240 units (2008).

If we take another step up and look at those projects with more than 600 units, there have been only 17 projects over the last 13 years but 35% (6 projects) of those projects opened in 2012. Of those 17 projects 2 are completed, 9 are under construction and 6 are in a pre-construction stage.

Check back soon as I’ll run the same numbers on building height to see if we’re getting taller on average….

Posted in GTA NH

2012 GTA New Home Sales

Here are the yearly new home sales figures in the GTA for 2012.

High Rise: 18,755 sales; down -35% from 2011; down -10% from 2010

Low Rise: 14,069 sales; down -20% from 2011; down -14% from 2010

Total New Homes: 32,824 sales; down -29% from 2011; down -12% from 2010

yearly historical sales dec12

I’ll be back shortly with some more data.

Posted in GTA NH

December 2012 GTA New Home Sales

Here are the RealNet results for December 2012 new home sales in the GTA. I’ll follow shortly with our 2012 year end numbers.

High Rise: 501 sales; down -54% from Dec. 2011

Low Rise: 403 sales; down -50% from Dec. 2011

Total New Homes: 904 sales; down -52% from Dec. 2011

Image

Posted in GTA NH

Ramblings on Evaluating the Changing New Home Market

I spend my days preparing a multitude of charts and graphs which present the GTA new home market in a wide variety of ways. As I’m curious about these things, I attempt to discern meaning from each chart and what it might indicate regarding the future performance of the new home market.

I’m under no obligation to do this. We don’t provide “official” interpretation or prepare forecasts on what we think will happen next year. We stick to the facts.

But curiosity, years of chart making and pattern watching, and reading all manner of media reports and analysts commenting on the market leads me to believe the metrics typically used to analyze the market are not changing as the new home market is changing.

Perhaps it’s more about perspective and perhaps the metrics used are fine but we just need more of them now to paint an accurate depiction of the market.

As an example I have written about the “shift” from a mostly low rise (detached) market to a mostly high rise (apartment) market and how this limits the ability of the metric of Housing Starts to fully explain and evaluate the market.  But there are other complexities related to the evaluation of Sales, Remaining Inventory, and Units Under Construction, particularly in the High Rise new home market, that require additional perspective. Any one metric has a few ifs and buts attached to it…

Here’s an example: November high rise sales were 1,556 units. That’s down -60% from the same month last year. However, our research team pointed out that there were 10 new projects that had their first firm sales in November (opened Oct20 to Nov19) and they were collectively 49% sold out in their first month. The 904 sales in these 10 projects accounted for 58% of November’s high rise sales. Maybe we should call it a Tale of Two Markets (3 if you count Low Rise).

So, now we want to quantify the difference between the sales performance of “new inventory” vs. “old inventory” and see if we can learn anything.

First, let’s look at yearly sales from 2007 through Nov. 2012 compared with total units from the new openings of each year (finally some charts…)

yrly sales and new openings

In the above chart their is definitely a relationship between high rise sales and new openings. It appears that sales will track the number of units in new openings for each given year. Yearly sales (not incl Dec2012) are averaging 94% of new openings (sales/openings) over the last 6 years – ranging from 79% in 2008 to 142% in 2009. So far 2012 is at 81% but will change slightly when December sales are added.

Now if we drill down and look closer at the makeup of monthly sales based on when the sold unit was originally available for sale (ie year of project opening) we get the following chart…

mnthly sales by opening year

From this chart we find that on average, over the past 6 years, 61% of the sales in any given year were units that opened that year.

Specifically, so far in 2012, 63% of the yearly sales were in projects that opened in 2012. In 2011 it was 69%, in 2010 65%, in 2009 40% (openings were mostly in H2), in 2008 57%, and in 2007 64% of yearly sales opened in 2007.

Also, of the total units opened in a given year, on average over the past 6 years, 58% are sold during the year they opened. So far in 2012 51% of the new openings have sold. In 2011, 66% of new openings sold. In 2010 62% sold; in 2009 57% sold; in 2008 45% sold; and in 2007 59% of new units sold that year.

So now, I’m convinced that most of the units sell in a given year were units in projects launched in that same year. So if “new inventory” sells faster than “old inventory”, how long does it take the “old inventory” from a given year to sell out?

Here’s a chart of monthly remaining inventory over time with each colour representing the year of project opening – the year that inventory was first available for sale.

mnthly rem inv by opening year

The chart above does a great job illustrating the long tail of supply (remaining inventory) from each year. The long tails are the “old inventory” which get taken up at a much slower rate than the “new inventory”.

At the end of November 2012 the remaining inventory of 21,398 units were 51% from 2012 projects, 29% from 2011 projects, 9% from 2010 projects, 3% from 2009 projects, 4% from 2008 projects and 3% from 2007 projects.

Now here’s some general speculation on my part (please send me your comments or questions directly). So with the majority of marketing efforts, and resulting sales, occurring at the beginning of project sales cycles, and with the sales of older inventory likely somewhat dependent on the progression of a project’s construction schedule we’ve got two high rise markets from a timing perspective. Alternatively, if investors are the predominant buyer type at the beginning of the sales cycle, does that mean owner occupiers are the more typical buyer toward the end of the process?

There are lots of implications to be investigated here. Things like the suite mix and price changes throughout a project impacting sales or financial performance; or do more projects under construction slow delivery timelines and thus slow end of tail sales.

Anyway, I have many more charts and numbers to share on this (check back next week) but feel the need to wrap up for now. Generally however, I think we need to now consider a wider variety of metrics, including the sub-components of new home sales in the high rise market as the marketing approaches and delivery timelines of today’s predominant new housing form are now so different than 10 years ago. It’s the only way to accurately gauge ongoing market performance.

Posted in Data Use, GTA NH

GTA New Home Sales – November 2012

Here are the November 2012 numbers for new home sales:

High Rise: 1,556 sales; down -60% from Nov. 2011; down -7.4% from long term average

Low Rise: 960 sales; down -38% from Nov. 2011; down -50% from long term average

Total New Homes: 2,516 sales; down -53% from Nov 2011; down -30% from long term average

historical nh sales review for blog nov12_Page_1

And the Year to Date (Jan. through Nov.) numbers are as follows:

High Rise: 18,103 sales; down -35% from YTD 2011; down -9.5% from YTD 2010; up +15% from long term average

Low Rise: 13,663 sales; down -18% from YTD 2011; down -11.6% from YTD 2010; down -38% from long term average

Total New Homes: 31,766 sales; down -28% from YTD 2011; down -10.4% from YTD 2010; down -16% from long term average

historical nh sales review for blog nov12_Page_2

Back soon with more numbers since this is really the unofficial year end (December usually doesn’t add much drama) of the new home sales year and we want to make sure you have enough facts and perspective to inform and entertain family and friends over the holidays (everybody loves housing charts).

Posted in GTA NH