It’s a question of supply and demand.
Across the five major regions that make up the Greater Toronto Area, only 1,568 new detached, semis and townhomes were available for sale in July – a drastic 90 per cent plummet in inventory from a decade earlier.
In response to the dearth of supply, prices launched skywards, with the average cost of a new GTA low-rise house crossing $900,000 for the first time ever last month (up 12 per cent year-over-year).
New detached homes already cracked the million dollar mark back in March.
The new figures were released by the Building Industry and Land Development Association (BILD), whose president, Bryan Tuckey, announced “New low-rise home prices have grown exponentially due to limited supply.”
Low-rise home is a collective term for detached, semis and towns.
Based on 10-year sales trends, it would take less than one month to clear the stock of new low-rise houses on the market. Six months of supply is generally considered a balanced market while one month of inventory is a clear sign that conditions are those of an extreme seller’s market.
The new condo market also saw a decline in supply to 15,645 suites, with units in the pre-construction phase, in particular, falling by 25 per cent from just a year ago. The drop hints that high rises are facing some tightening in inventory, but in all cases, it still pales in comparison to the massive plummet in supply seen in the low-rise family housing market.
Never lived in high rise units changed hands for an average of $594 per square foot or $475,764, up 7 per cent from the same time last year.
The study also highlighted that sizes of new condos experienced a slight bump, with average square footage of units hitting 801 in July, a considerable increase from 775 square feet twelve months earlier.
“In previous years, many builders were focusing on offering smaller and more affordable units to help first-time buyers enter the market,” said Tuckey. “Recent months have seen the introduction of larger suites to meet the demands of the growing range of buyers who have been priced out of the low-rise market.”
New Home Sales Facts
In response to a shortage of available houses and rapidly rising prices, sales of new detached, semis and townhomes saw drastic declines in July.
Sales of low-rise homes dropped 32.5 per cent across the GTA.
Durham (home to cities such as Oshawa and Pickering) was the only region that saw a large-scale jump in the number of new low-rise homes changing hands. Sales in the eastern region increased by 66.8 per cent.
Condominiums, on the other hand, saw a monumental 52 per cent jump in sales across the GTA, no doubt egged on by their far more affordable price points and sufficient levels of inventory.
New Home Prices Summary
- New Detached Home
GTA-Wide Avg. Price: $1,095,910
- New Semi-Detached Home
GTA-Wide Avg. Price: $771,530
- New Townhouse
GTA-Wide Avg. Price: $758,434
- New Condo High Rise
GTA-Wide Avg. Price: $475,764
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