Due to a lack of new housing supply, the average prices for both new single-family detached houses and high-rise condominium units in the GTA reached unprecedented levels in November, says the Building Industry and Land Development Association (BILD).
The number of new homes on sale in the GTA remains around all-time lows. At the end of November, there were 15,184 new homes in builders’ inventories, only 84 more than in August, which reported the lowest level on record. Housing supply has plunged over the past decade. In November 2006, there were 31,150 new homes available for sale, according to Altus Group, BILD’s official source for new home market intelligence.
At the end of November, low-rise homes only accounted for 13 per cent of available inventory with only 2,036 units, 789 of which were detached single-family houses. Available high-rise supply was also lower in November, dropping to 13, 148 units.
“The low inventory story is not only about low-rise – high-rise inventories have been on a downward path over the past three years,” said Patricia Arsenault, executive vice president of research consulting services at Altus Data Solutions, in a press release. “Total available inventory in November was the lowest November level we have seen since we first started to track this data in 2000.”
Low levels of inventory resulted in record-setting prices for both detached homes and condominium units in November. The average price of new condos in the GTA reached $493,137, a 10 per cent increase year-over-year. Condo unit size continued to increase with the average in November at 820 square feet.
Meanwhile, the average price of new detached homes in the GTA reached $1,230,961 in November, which is 27 per cent higher than the same period one year before. Since the beginning of 2016, new detached single-family homes in the GTA saw prices climb more than $258,000.
Overall, average prices for new low-rise homes, which include detached and semi-detached houses and townhomes, increased 20 per cent over a one-year period. In November, the average price of a low-rise home climbed to $977,890.
“The industry is building to government policy and building far fewer low-rise homes, especially detached single-family homes, but demand has not dropped with the supply so prices continue to increase,” explained Michelle Noble, vice president of communications, marketing and media relations at BILD.
By the end of November 2016, there were 8,843 detached homes sold in the GTA, which is 16 per cent less than one year before. During the same period 10 years ago, 12,273 detached homes were sold in the region.
Overall there were 43,651 new homes sold in 2016, of which 60 per cent, or 26,299 homes were high-rise, while low-rise totalled 17,352 homes.