New Condos in Toronto investment opportunities
If you are one of the lucky or smart ones that invested in the condo market right before its sales boom in 2009 you would be looking at a development return of over 100%. The average one-bed condo in 2010 was 280,000. Now, that same condo in 2020 is 580,000.
1 year 7.36%
5 year 68.9%
10 year +104%
These numbers are roughly the same 2 bedroom and 3 bedroom condo units. If you invested early in the development stage, you would’ve made a great return from pre-construction developments and condos. But don’t worry, there are still great development opportunities to invest in Toronto with new or pre-construction condos.
Real Estate Growth – New Condos Toronto
Over the past 20 years, the desire to live in downtown Toronto has grown immensely. With that, the density of real estate and development projects is growing. It was common to see condos with a $300-dollar price per square foot in the early 2000s. That number has ballooned with condos and development sales averaging at $1,000 price per square foot. There are even some sales in the city seeking as much as $2,000 in price per square foot. The sale of condos and pre-construction property developments have also risen.
Before 1967, condominiums were not even legal in the city. However in the last few years, condos are seen as the only option for affordable living in the hot Toronto real estate market, so sales of development condominiums have gone up. Many millennials prefer new condo developments because they require less time and maintenance than a standard home. Growth and sales over the decades has been consistent. In the 1990s, roughly 50,000 condos where added in the greater Toronto area. A majority of those were purchased to be rented out as their desirability wasn’t quite so high.
In the late 90’s, boomers downsizing and younger couples looking for condos and pre-construction developments escalated sales. Once considered a bit of a novelty in Toronto’s real estate market, new condo growth and development sales in the early 2000s was growing full force. It added roughly 105,000 condos, double the amount in the 90’s. In 2008 when the global financial crisis was in full swing due to the US housing crash, Toronto stayed relatively strong. There were several projects back by American investment companies, but those new condo developments would eventually be sold off to Canadian investors and builders. Growth and pre-construction sales were even stronger in the 2010s as of 2018 Toronto has added an additional 110,000 condos with many of those Toronto condos being purchased by millennials, investors and first-time home buyers. Along with the growth came the increase in price per square foot. In an effort to slow down the market, the government issued brand-new mortgage rules, which seemed to have little effect on price. Toronto’s desirability, stemming from its strong economy and urban lifestyle, will continue to drive sales and price per square foot for the foreseeable future.