The just released new housing market data for February are both encouraging and discouraging.
The data, provided by our official source of new home market intelligence Altus Group, shows record sales for the condominium market, especially in the 905 Region, and it shows an unprecedented scarcity of new housing inventory, particularly for low-rise homes.
It also shows that while government is setting the laws for the housing industry to follow, it’s the laws of unintended consequences that are following our market.
Provincial land use policies, like the Growth Plan meant to limit sprawl and encourage urban intensification are well intentioned, but they are helping create our current housing crisis situation. Today we are seeing frustration, angst and fear among consumers, inflated pricing, and undiminished demand for ground related homes.
Altus’ data showed that at the end of last month there were only 324 new detached homes available for purchase in builders’ inventories across the entire GTA. A decade ago there were more than 10,000 homes waiting for buyers.
For those who took a high school economics class, you probably remember the unit on supply and demand. New housing scarcity is at an all-time high, and has resulted in higher home prices. Record high prices. Available new, single detached homes in the GTA averaged $1,469,449 last month, and if you factor in additional low-rise product like townhomes and semi-detached homes, the average price was $1,081,013.
The industry is following provincial intensification policies and we are selling and building fewer ground related homes and more high and mid-rise ones. Last month more than twice the number of condo apartments were sold than low-rise homes, and majority of them were sold in the 905 area. Altus’ data found that 1,661 of the condo suites were sold in Toronto, while Durham, Peel, Halton and York collective accounted for 1,881 sales.
Demand for available condo suites in the GTA continues to be strong and inventory levels dropped again in February, reaching a new low of just 10,342 units.
The significant decline in all types of inventory and record high prices show that the government’s land use policies are having a real impact on people in the GTA. Whether you live (or want to live) in a house, townhouse, or a condo apartment; whether you want to live in 905 or 416, there’s no escaping the reality that the market is experiencing a crisis, and new policies are desperately needed. Before it’s too late.