Residential-density land sales slump in GTA
May 31, 2023
image: GTS land listing
Sales of development land for high-density residential development have slumped in the Greater Toronto Area (GTA), falling more than 50 per cent from 2022 during the first quarter of 2023.
The GTA High-Rise Land Insights Report from Bullpen Research and Consulting and Batory Management, released May 25, also showed land prices rallied in the first-quarter 2023 after declining to a five-year low at the end of 2022.
There were 24 high-density land transactions in the GTA in Q1 2023, which averaged 1.6 acres in size and sold for about $34.5 million. There were 51 such apartment and condo land transactions in Q1 2022.
The average estimated price was $92 per-buildable-square-foot in Q1—a decrease of 3 per cent annually but an 11 per cent increase from Q4 2022. The Q4 2022 price was the lowest tracked since the first report was published in Q4 2017.
After pricing in the 416 area code (Toronto core urban area) dropped to $100 per-buildable-square-foot in Q4 2022, it rebounded in Q1 2023 to $123, just below the $124 Q1 2022 price.
The Q1 2023 land price in the 905 area code (mainly suburban Toronto areas) was $49 per-buildable-square-foot—down 29 per cent annually and nearly 16 per cent below the Q4 2022 price of $58.
The report stressed this doesn’t necessarily imply land values are down almost 30 per cent because the sample of trades wasn’t large and the composition of sales can vary considerably from quarter to quarter.
The average land price in old Toronto was $160 per-buildable-square-foot from Q1 2018 to Q1 2023 with a low of $140 in 2022 and a high of $187 in 2019. It was $143 in Q1 2023.
Bullpen president and owner Ben Myers attributed the price increase from Q4 2022 to more sales in higher end locations and deals that originated when the market was booming from Q2 2021 to Q1 2022 but didn’t close until early 2023. He said prices overall still seem to be trending downward.
“I think it's going to remain relatively slow throughout 2023 and into 2024 in terms of new condo sales,” said Myers.