New Detached Homes in
Toronto Now Selling for $1.8 Million
Thursday, June 1, 2017
Housing prices continue to rise in the new home market in the Greater Toronto Area, despite provincial measures to cool the real estate sector, according to new data from the Building Industry and Land Development Association.
It might still be too early to tell what impact the provincial changes, including a 15% non-resident speculation tax, might have on the market, but the numbers from April continue to show a supply shortage in the GTA.
The average price of a new low-rise single family home, which includes detached, semi-detached and townhomes, was up 40 per cent from a year ago to $1,212,297 in April. In March, the average was $1,124,600. In the detached segment, the average asking price across the GTA was $1,810,232 last month, an increase from $1,783,417 in March.
“Builders are not able to keep up with the demand for new housing,” said Bryan Tuckey, chief executive of BILD. “The product that builders are able to bring to the market is quickly purchased and prices for all types of new homes keep increasing as a result.”
Altus Group, which supplies the data for BILD, said 4,680 new homes sold in the GTA last month, an increase of 7% from a year ago.
Over the first four months of the year, 17,977 new homes were sold, an increase of 24% from the same period a year earlier and 48% above the 10-year average for the month.
“The supply of new homes, the number of homes available to buyers in builders’ inventories at the end of the month, continued its unabated decline,” said BILD, in its release. Industry groups have complained that the new provincial rules do little to deal with the underlying problem in the market, which they say is a lack of supply brought on by restrictive government rules.
In a decade of data, BILD and ALTUS Group said overall inventory has never dropped below 10,000 before it reached 9,387 new homes in April. A year ago, there were 21,056 new homes available for purchase in builders’ inventories.
Prices for available new multi-family homes, condo apartments in high-rise and mid-rise buildings and stacked townhomes, also shot up 24% from a year ago. The average price of available units was $570,226 in April and $685 per sq. ft. with average unit size 832 sq. ft.
The price of available condo apartments rose because the average price per sq. ft. was up 17.5% from a year ago, but also because the size of the average condominium continues to rise as consumers look to different housing options.
“The declining number of new homes available to purchase is not a question of less product being brought to market,” says Patricia Arsenault, executive vice president of research consulting services with Altus Group.
“There were more than 11,000 units in projects opened in the first four months of this year – that’s about one-third higher than the average for the previous two years. But new product is selling well. For example, for projects opened in the first quarter of this year, only one in five units were still available to purchase at the end of April; for the same period in 2015, that proportion was about double (two in five).”