Sales of new homes in the GTA fell by 69 per cent year-over-year in August 2017, but year-to-date sales remain strong, reports the Building Industry and Land Development Association (BILD).
Only 795 new homes were sold in August in the GTA, according to Altus Group, BILD’s official source for new-home market intelligence. Low-rise single-family homes, including detached and semi-detached houses as well as townhomes, accounted for only 114 of the homes that were sold, which 681 were multi-family homes, condo apartments in high-rise and mid-rise buildings and stacked townhomes.
According to Bryan Tuckey, BILD president and CEO, August is typically a slower month. “One month does not a trend make. Late summer is a quiet time for real estate, and most builders wait until September to launch developments and bring new product to market,” he said, in a press release. “We are expecting fall to be very busy, and 2017 could still be a record year of new home sales driven by the incredibly strong condo market.”
Although August’s sales were 62 per cent below the 10-year average, year-to-date sales are still ahead of last year at this point, and 28 per cent above the 10-year average.
To date this year, there have been 31,749 new homes sold in the GTA, the majority of which were multi-family units, high-rise and mid-rise condo apartments and stacked townhomes. Only 20 per cent of year-to-date sales were low-rise single-family homes.
“The longer-term decline in single-family’s share of new home sales has now kicked into hyperdrive – dropping from about one-half in 2015 to one-third last year, to less than one-sixth in recent months,” said Patricia Arsenault, Altus Group’s executive vice president of research consulting services. “While underlying demand suggests the pendulum should start to swing a bit back towards the single-family side, in reality it will be stopped in its tracks unless there is a significant increase in new single-family product making it to the market.”
The supply of new housing increased slightly in August, but is still far below what is considered a healthy level. At the end of August, there were 6,608 multi-family homes and 1,880 single-family low-rise homes available for purchase in builders’ inventories.
With this slight increase in supply, there was a corresponding slight decrease in prices. The average price for available new single-family low-rise homes was $1,289,298, a dip from July’s $1,316,693. However, August’s average price is still 38 per cent higher than one year ago, when the average price was $931,506.
The average price of available multi-family homes in the GTA in August was $644,327, down from July’s average of $665,041, but it was still 34 per cent higher than one year ago.
The price decrease for available new condo units in the GTA was caused by slight declines in both the average unit size and the price per square foot of available units. The average unit size in August was 859 square feet, but in July, it was 871 square feet. The average price per square foot was $750, down from July’s $764. One year ago, the average price per square foot was $595, and the average unit size was 808 square feet.