In May, the GTA’s new home market saw another increase in the prices of condominium apartments with condo sales close to the 10-year average and remaining condo apartment inventory falling, announced the Building Industry and Land Development Association (BILD).
The benchmark price for new condominium units in low-, medium- and high-rise buildings, stacked townhouses and loft units climbed to $758,370, which is 25.4 per cent higher than last May’s levels, according to Altus Group, BILD’s official source for new home market intelligence. The benchmark price of new single-family homes, including detached, linked and semi-detached houses and townhouses (excluding stacked townhouses), fell 6.4 per cent year-over-year to $1,144,191.
In addition to strong demand from new home buyers looking for more affordable housing options, the continuing increase in condo apartment prices can be somewhat accounted for by an increase in average unit size from 814 square feet one year ago to 892 square feet in May 2018. This change reflects a demand for family-sized units, and an increase in the average price per square foot from $743 last year to $850 this year.
“It is doubtful prices [of new single-family homes] will continue to moderate, considering embedded government fees, taxes and charges, and high land costs due to regulatory constraints,” said David Wilkes, BILD’s president and CEO, in a press release. “Leading up to the October 22 municipal elections, as part of our Build for Growth campaign, we will be putting forward a four-point plan on how municipalities can help tackle the issues of housing supply and affordability in the GTA. We are encouraging residents to send letters calling for action on these issues to their candidates for municipal office.”
Condo apartments accounted for 2,003 of the 2,345 total new home sales in May 2018, which is only one per cent below the 10-year average for condo apartment sales in May. However, this figure was a 47 per cent decline compared to May 2017’s record-high 3,766 condominium apartment sales. Meanwhile, there were 342 single-family home sales, a drop of 33 per cent compared to May 2017 and 78 per cent below the 10-year average.
“May’s new condominium apartment sales were very strong,” said Patricia Arsenault, Altus Group’s executive vice-president, research consulting services. “Not only was it the strongest month since last November, but the sales of 2,003 units are impressive in historical terms: there have only been five other years where May new condominium apartment sales topped this year’s performance.”
The increase in condominium apartment sales and only five openings, representing 719 units, in the month of May meant that remaining inventory for condos had fallen to 9,345 units. Remaining condominium inventory includes units in preconstruction projects, in projects currently under construction, and those in completed buildings. The remaining inventory for single-family homes climbed slightly to 4,505 units in May.