Sales of newly constructed homes in the Greater Toronto Area slowed in July, while the overall supply of new homes continued to fall and prices of available homes continued to climb, announced the Building Industry and Land Development Association (BILD).
According to Altus Group, BILD’s official source for new-home market intelligence, July saw 1,752 new home sales, a decline compared to recent months and year-ago levels.
“July is typically a slow month and many builders wait until fall to launch developments and bring product to market,” reasoned Bryan Tuckey, BILD’s president and CEO, in a press release. “We are not seeing an increase in unsold product sitting on the market. In fact, we are seeing new housing supply continue to shrink from what are already depleted levels.”
At the end of July, there were 7,801 units in builders’ inventories, a new low. One year ago, there were 16,900 new homes available to GTA homebuyers. One decade ago, there were 28,358 new homes available.
The number of low-rise single-family homes (including detached and semi-detached houses and townhomes) that were sold increased by about 100 homes to 1,713. Meanwhile, the supply of multi-family condo apartments in high-rise and mid-rise buildings and stacked townhomes fell to 6,088 units. One year ago, there were 15,298 condo apartments available for purchase.
Prices of the new homes available in builders’ inventories continued to climb in July. The average price for available new low-rise single-family homes was $1,316,693, up from June’s $1,250,262 and 45 per cent higher than a year ago when the average price was $906,508.
Meanwhile, July’s average price of available new condominium units in high-rise and mid-rise buildings and stacked townhomes in the GTA was $665,041. That figure is a 40 per cent increase compared to one year ago, and a $38,000 increase compared to June’s average price.
The price increases for available new condominium apartments in the GTA resulted from both increases in average unit size and growth in the price per square foot. The average unit size in July was 871 square feet, compared to 801 square feet one year ago. The average price per square foot in July 2017 was $764, a significant climb compared to the July 2016 average of $594.
Sales of new multi-family condo apartments in high-rise and mid-rise buildings and stacked townhomes declined from the record high volume of recent months, but the 1,615 units sold were four per cent above the 10-year average for July sales.
Condominium units accounted for 92 per cent of July’s new home sales in the GTA. Sales of low-rise single-family homes fell significantly to only 137 homes sold in July, which is the lowest this level has been in decades.
“You can’t buy what isn’t there,” said Patricia Arsenault, Altus Group’s executive vice president of research consulting services. “There are typically few new home project openings in July and this year was no exception. And among the limited number of new single-family homes available to purchase in builder inventories, the majority are simply not affordable to most potential buyers. Trying to find a new single-family home today in the GTA priced at less than $1 million is a daunting task.”
“One month does not a trend make,” added Tuckey. “While overall sales may have slowed down a bit in July, it is likely that things will pick up again in the fall as more product comes to the market, and despite the dip in July, we are on pace for a record year for new home purchases in the GTA.”
As of the end of July, there were a total of 30,727 new homes sold in the GTA, which is nearly 2,000 more than at the same point last year and well above the 10-year average of 22,680. Multi-family condominium apartments in high-rise and mid-rise buildings and stacked townhomes accounted for nearly 80 per cent of 2017 year-to-date sales with 24,411 units sold.
