In June, the Greater Toronto Area (GTA)’s new housing market continued to climb with condominium sales in the region reaching a new record high, reports the Building Industry and Land Development Association (BILD).
Sales of new multi-family condo apartments in high-rise and mid-rise buildings and stacked townhouses climbed almost 59 per cent over May to 5,495 units, while prices for available units also continued to climb, according to Altus Group, BILD’s official source for new-home market intelligence.
New home sales jumped 23 per cent year-over-year with 28,889 new homes sold so far in 2017 – a 14 per cent increase compared to the same period in 2016 and a 44 per cent increase over the 10-year average.
“We continue to see that the province’s Fair Housing Plan in effect since April has had little impact on the new home market,” said Bryan Tuckey, BILD president and CEO, in a press release. “Unlike the resale market which experienced a slowdown last month, the numbers reflected in the new homes market are quite different. Prices continue to rise and supply continues to be low. Three out of four of the new homes purchased in the GTA so far this year have been condo apartments. With condo prices continuing to escalate, this segment of the market is becoming out of reach for many consumers.”
Of the 6,046 new homes sold in total last month, 91 per cent were multi-family condo apartments in high-rise and mid-rise buildings and stacked townhomes, while only nine per cent were low-rise single-family homes.
New condo sales topped the previous record set in March 2017 with 5,495 units sold last month, an increase of 89 per cent year-over-year and well above the 10-year average of 2,550 units. In June, 551 new single-family low-rise homes were sold, which is a 72 per cent decline from June 2016 and 64 per cent below the 10-year average.
Patricia Arsenault, Altus Group’s executive vice president of research consulting services, says the record number of condo sales in June came down to a ‘perfect storm’ of factors. “These factors include: the sizeable number of units in new condo projects opened in May and June (over 8,500); demand from end-user buyers who might have preferred a single-family home but have adjusted their expectations due to a lack of affordable supply; and heightened investor interest due to the rapid price increases for condo apartments in recent months,” she said.
The average price of available new condominium apartment units continued to rise, and experienced a month-over-month jump of $22,000 over May to $627,000. This average price was 34 per cent higher than the average price of a condo in June 2016. The average available unit size was 845 square feet, with an average price per square foot of $742. One year ago, the average price per square foot sat at $587.
In June, the average price of available new low-rise single-family homes only increased slightly month-over-month to $1,250,262, but that is more than 40 per cent above year-ago levels when the average price was $887,543.
Although prices continue to climb in the low-rise single-family sector for available new semi-detached and townhome units (to $943,115 and $1,091,151, respectively), the average price for a detached home fell by nine per cent month-over-month in June to $1,761,985.
The supply of new homes across all home types in June fell by nearly 20 per cent in June to 8,661 as high-rise inventory continued to fall and inventory in low-rise single family homes remained low.
June 2017 saw 10,820 new homes available to buyers, but one year ago, there were 18,063 new homes available. In June 2007, however, there were 30,300 new homes in builders’ inventories, of which slightly over half were low-rise single-family homes.
“The ongoing drop in new housing inventory demonstrates how hard it is for the industry to bring new homes to the market,” added Tuckey. “The challenges builders face including lack of serviced and permit ready developable land and out of date zoning bylaws continue to impact the supply of housing. It’s time for governments to work with the industry in order to help bring supply in builder inventories to a healthy level.”