Amid condo glut, Toronto condo developers luring buyers with discounts

John Manneh November 8, 2013

condo-glut06rb1Toronto condo developers are ramping up efforts to attract buyers, offering their biggest incentives yet amid a market glut.

Inventory in slowly increasing in Canada’s most populous city, and a large number of new towers are still projected to come on stream next year. To make unfinished projects stand out, the incentives that developers are offering to buyers have become more valuable. These incentives are less gimmicky than those that were seen when the market was hotter, and instead amount to a large discount on the purchase price.

We’re seeing a larger number of incentives and their absolute value has increased relative to past offerings,” says Mimi Ng, vice-president of marketing at Menkes Developments Ltd. “The market is definitely in a much more competitive state than last year.”

There are some 300-odd new condominium projects that are actively selling units in the Greater Toronto Area, she adds. “That’s a lot of developers with a lot of product that’s still sitting on their books that they have to sell.”

Sales of these units are being watched closely in Montreal, where real estate players are increasingly concerned a similar glut is forming.

In Toronto, sales of new condos during the first nine months of the year came in at 10,449 units, down 21.5 per cent from the average level of the past decade and 27.4 per cent from the 14,399 units sold during the first nine months of 2012, according to data from RealNet Canada Inc. There were 20,726 sales during the same period in 2011.

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