In June, the GTA’s new housing market continued to climb with condominium sales reaching a new record high.
Sales of new multi-family condo apartments in high-rise and mid-rise buildings and stacked townhomes jumped 59 percent from May and prices for available units also continued to push higher, according to Altus Group, BILD’s official source for new-home market intelligence.
New home sales were up 23 percent from June 2016 with 28,889 new homes sold so far in 2017 – a 14 percent increase from the same period in 2016 and a 44 percent jump from 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,” says BILD President and CEO Bryan Tuckey. “Unlike the resale market which experienced a slow down 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.”
About 91 percent of the 6,046 new homes sold last month were multi-family condo apartments in high-rise and mid-rise buildings and stacked townhomes, while only nine percent were low-rise single-family homes.
New condo sales surpassed the previous record set in March 2017 with 5,495 units sold last month, up by 89 percent from a year ago and well above the 10 year average of 2,550 units sold. In June, 551 new single-family low-rise homes were sold reflecting a 72 percent drop from last year and 64 percent off the 10 year average.
“The record number of condominium apartment sales in June was the result of a ‘perfect storm’ of factors”, says Patricia Arsenault, Altus Group’s Executive Vice-President of Research Consulting Services. “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 lack of affordable supply; and heightened investor interest due to the rapid price increases for condo apartments in recent months.”
The average price of available new condo apartments continued to rise with an increase of more than $22,000 from May. June’s $627,000 average price marked a 34 percent increase from a year ago. The average available unit was 845 square feet with an average price per square foot of $742. A year ago, the average price per square foot was $587.
Last month, there was a small increase from May in the average price of available new low-rise single-family homes reaching $1,250,262 but more than a 40 percent increase from a year ago when the average price was $887,543.
While the upward pricing trend continued 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 decreased by nine percent in June from last month to $1,761,985.
The supply of new homes, the number of homes available to buyers in builders’ inventories at the end of the month, dropped substantially by almost 20 percent in June to 8,661 as high-rise inventory continued to fall and inventory in low-rise single family homes was still very low.
Last month there were 10,820 new homes available to buyers and a year ago there were 18,063 available in builders’ inventories. In June 2007, there were 30,300 new homes in builders’ inventories, of which 15,584 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,” Tuckey adds. “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.”