Toronto condo market loses steam

Toronto condo sales in the first half of 2012 are the second highest ever for that time period, but the market is still losing some steam.
A healthy appetite for condos still exists in Toronto, research firm Urbanation says. (Evan Mitsui/CBC)

Toronto condo sales in the first half of 2012 are the second highest ever for that time period, but the market is still showing signs of losing some steam.

Urbanation, a research firm that tracks the Toronto market, released second-quarter numbers Thursday that show there were 4,769 new condo units sold between April and June in greater Toronto area, down 21 per cent from this year's first quarter and 50 per cent from the second quarter of 2011.

However, the 10,869 new condo sales from January to June is the second highest year-to-date total.

Urbanation also notes that there were 5,050 condo resales in the quarter — a 30 per cent jump over the first quarter and a 9 per cent increase compared to the same time last year.

"We were very surprised by the resale results in the second quarter," Ben Myers, the firm's executive vice president, said in a statement. "A healthy appetite for condominiums from end-users still exists."

They'll need to be hungrier still: There are a record number of unsold units at 18,123 in the second quarter.

"We expect fewer launches in the second half of 2012 than the latter half of last year, as developers would like to see some of the unsold supply absorbed before bringing their projects to market," Myers said.

Urbanation expects 20,000 new condo sales and 17,500 resales by the end of the year.  

An expected rise in interest rates and new mortgage rules, in combination with waning enthusiasm from investors, are all expected to slow the demand for condos going forward, a recent Royal Bank report said. The same report said concerns about a Toronto condo bubble may be "overblown."