Consumers snapped up 3,623 new high-rise homes in the GTA in May, making it the second-best month on record, next to November, 2011, reported the Building Industry and Land Development Association (BILD). As sales activity picked up in the condo segment, new low-rise inventory slipped to an unparalleled level of 1,985 homes.
The sales figures for new high-rise homes last month soared 76 per cent compared to the same month the previous year and represented close to twice the 10-year average of 1,896 units. New home sales also rose month over month in May, following 2,324 new homes sales in April, which amounted to a 14-per-cent decline compared to April, 2015.
Altus Group, BILD’s official source for new-home market intelligence, found that May’s strong high-rise sales had help from the launch of two major condo projects in the GTA. Liberty Development Corporation sold 780 units in the Vaughan-based Cosmos Condominiums’ Tower A and Tower B, while LeMine Investment Group’s Central Park Downtown Ajax was responsible for 400 sales.
It’s not a surprise, then, that Durham and York regions, where these projects are located, enjoyed the highest increases in sales. Halton was the only GTA region that didn’t see an increase in sales. Meanwhile, the 2,091 new low-rise homes sold in May marked a 15-per-cent decrease from the same period last year.
As high-rise sales ascended in May, so did prices, with the average price of a new high-rise home posting a three-per-cent increase year over year to $454,304. At $573, the average price per square foot also represented a three-per-cent year-over-year uptick.
At the same time, the average price of a new low-rise home in the GTA broke previous records, ringing in at $875,154. The average price of detached homes, which topped $1-million in March, climbed higher still to $1,125,988.
“A shortage of serviced developable land in the region is significantly reducing the supply of new low-rise homes brought to market and helping drive up prices,” said Bryan Tuckey, president and CEO of BILD, in a news release.
“Healthy levels of condo supply, combined with creative suite design that maximize each square foot of space, have helped keep home ownership within reach for the many buyers who have been priced out of the low-rise market.”
The monthly market stats come on the heels of the Ontario government’s announcement in May that it intends to increase its density and intensification targets in its growth plan for the province. That growth plan is what paved the way for the change in composition of housing supply, a shift away from low-rise and toward high-rise, over the last decade, according to BILD.
In May 2006, builders’ inventory numbered 16,420 low-rise homes and 13,334 high-rise homes. As low-rise supply has dwindled to less than 2,000 homes, high-rise supply has risen to 17,224 homes. As the composition of housing inventory has changed, total supply has slid from 29,754 homes a decade ago to 19,209 homes last month.
“The industry is following the Province’s Growth Plan intensification policies which emphasize high-rise development in the GTA,” said Tuckey. “Nine out of 10 of the new homes available for sale in the GTA are high-rise and mid-rise condominiums.”
BILD anticipates that the province’s latest plans will intensify some of the current trends observed in the housing market.
“The government recently released changes that call for more intensification across the GTA, which will create fewer low-rise options, resulting in less choice and higher prices for consumers,” said Tuckey.
Michelle Ervin is the editor of CondoBusiness.