The Province’s fair housing plan, introduced in April, has had little real effect on the new home market in the GTA. Prices continue to increase and supply, especially for single-family low-rise homes, continues to be low.
In May, the new housing market in the region showed few signs of slowing down, particularly the condominium segment, according to Altus Group BILD’s official source for new-home market intelligence.
Sales of new condo apartments in high-rise and mid-rise buildings and stacked townhomes, which are also known by the term multi-family housing, continued to be strong and the prices of available units increased substantially.
Meanwhile prices of available homes in the low-rise single-family segment, which include detached, semi-detached and townhomes, were also up albeit not as dramatically as in previous months. That being said, in May, for the first-time the average asking price for available new townhomes surpassed the million dollar mark. Available new detached homes reached that milestone only 15 months ago, and in May the average asking price for the few such homes that were available was $1,942,316.
While those numbers continue to be alarming, what really troubled me with the May sales numbers was the price acceleration in the condo portion of the market. The average price of available new condo apartments in the GTA was up more than $30,000 from April. May’s $604,683 average price was a 33 percent increase from a year ago. In the same period, the average price per square foot has gone from $573 to $743.
For many homebuyers, especially first time buyers, condos apartments are the only affordable option for owning a home in this region. Today the lion’s share of new housing in the GTA are condos. About 86 percent of the 3,902 new homes sold in May were multi-family condo apartments in high-rise and mid-rise buildings and stacked townhomes, while only 14 percent were low-rise single-family homes.
There is a lot of demand for new construction homes in the GTA and 2017 is proving to be a very strong year for sales of new homes, with record year-to-date sales. So far this year, 22,814 new homes have been purchased, and three out of four of them were condo apartments.
The supply of new homes, the number of homes available to buyers in builders’ inventories at the end of the month, increased modestly in May but it was still far below what would be considered a healthy level and it was 8,000 fewer units than a year ago.
At the end of May, there were 10,820 new homes available to buyers in the GTA, of which 9,406 were condo apartments and 1,414 were low-rise single-family homes. In April there were 9,387 new homes available, while a year ago there were 19,209 available in builders’ inventories. In May 2006, there were 29,754 new homes in builders’ inventories, of which 16,420 were low-rise single-family homes.