For 42 years, Hunter Milborne has been marketing and selling condominiums in and around the GTA. To date, the Milborne Group has sold over 105,000 units in 725 developments, generating more than $30 billion in total sales. They are the longest-operating firm in the field with the largest market share, which is why we’ve asked them to share some history and insights on this important market sector.
Condominium legislation was first passed in Ontario in 1967 and B.C. in 1966, which makes the industry still fairly young and evolving. In the early years, condos were considered the poor cousins of the housing industry. They were a cheap but affordable alternative to what everyone really wanted: a single-family house or townhome.
When Milborne started out in the mid 1970s, we established the luxury condominium market in Toronto with four developments. Two on the waterfront — Harbour Square and Palace Pier — and two in midtown — Hazelton Lanes and 150 Heath. We sold Harbour Square for an average of $60 per square foot and Hazelton Lanes for the very-high-at-the-time price of $100 per square foot.
As a percentage of all new homes sold in the GTA in the 1970s and ’80s, condominiums remained a blip on the radar. At the end of the 1990s, however, condo ownership had become mainstream and was representing an increasing percentage of total new homes sold in the GTA. By the early 2000s, of the roughly 40,000 to 45,000 new homes sold annually in the GTA, both apartment and townhouse condominiums represented about 25 to 30%.
Then the rules changed!
In 2005, with urban sprawl, disappearing farmland, and longer commutes, the government created the Greenbelt. Significant parcels of land were frozen from development and plans were made to go vertical around existing transit lines and already developed zones.
Net immigration to the GTA has been significant: 100,000 to 125,000 newcomers per year for the last 25 to 30 years and increasing. The Greenbelt choked single-family supply and caused an unprecedented spike in price that has continued since 2005 (with a few brief plateaus).
In hindsight, it seems easy to see what would happen, but even we didn’t understand the impact this would have on the future. Single-family and townhome prices began to rise and kept rising because of diminishing supply. In fact, in each subsequent year until now, condominiums have become an increasing share of the GTA’s new home housing market sales.
By 2017, roughly 36,000 new condominiums were sold in the GTA compared with less than 8,000 new single-family homes (most well over $1,000,0000). The vast majority of new condos are selling for $350,000 to $750,000, which is still relatively affordable. Meanwhile, the approval process has increased from an average of 18 months to over 36 months, in an industry where demand continues to exceed supply.
In 2012, CIBC issued a report that said, “The most expensive real estate in the world are the islands of New York, Hong Kong, Singapore. Effectively the Greenbelt has made Toronto an island.” CIBC Chief Economist Benjamin Tal recently said, “If you think it’s expensive now, just wait!”
In the next few issues, we will comment on the recent foreign buyers’ taxes imposed by British Columbia and Ontario and whether the top of the market is coming soon or is already here — $3,000+ per square foot!