New home sales in the GTA dropped slightly in November, as condominium apartments continued to comprise most of the sales and a record low number of new single-family homes were sold, finds the Building Industry and Land Development Association (BILD).
There were 3,473 new homes sold in November, according to Altus Group, BILD’s official source for new-home market intelligence. Of these homes sold, 3,161 units, or about 91 per cent, were condominium apartments in low, medium and high-rise buildings, stacked townhouses and loft units. Although condo sales for November 2017 fell eight per cent year-over-year, they were still 28 per cent above the 10-year average of 2,465.
Sales of new single-family homes, including detached, link and semi-detached houses and townhouses (excluding stacked townhouses) accounted for only 312 units, or nine per cent of total new home sales in November, a decline of 82 per cent compared to November 2016. This figure is 76 per cent below the 10-year average of 1,319 for November.
From January to November, there were a total of 7,455 single-family homes sold, which only accounted for 17.3 per cent of the total 42,922 new homes sold in the GTA. The number of single-family new home sales by the end of November 2017 fell 58 per cent compared to November 2016 and is 49 per cent below the 10-year average.
“The November data should not be interpreted as a sign of diminished demand for single-family housing in the GTA, in fact, quite the opposite,” said Bryan Tuckey, BILD president and CEO, in a press release. “Single-family housing is still the first choice for many people, especially for those with families. A big reason single-family homes represent a decreasing proportion of new home sales is that people simply cannot afford them. Our industry wants to build the single-family homes people want at prices they can afford, but we are required to implement provincial policies such as the Places to Grow Act, which mandate intensification.”
In November, the benchmark price for available new single-family homes was $1,223,610, an increase of 25.1 per cent compared to November 2016’s benchmark price of $977,890. Meanwhile, the benchmark price for available new condo apartments was $702,992 in November 2017, up 42.6 per cent compared to the benchmark price from one year before ($493,137).
“The decline in new single-family home sales in the GTA relative to last year in large part reflects low inventories of new homes available to purchase – and in particular, the lack of more affordable product,” added Patricia Arsenault, Altus Group’s executive vice president of research consulting services. “As well, with more resale single-family homes available to purchase compared to last year, many potential new home buyers now feel they can take the time to explore their range of options more carefully.”
The supply of single-family housing increased from 3,192 lots at the end of October to 3,438 lots in November 2017. However, overall supply of new housing fell to 11,788 units in November, which is well below what is considered a healthy level, according to BILD. Supply of new housing is usually measured by the number of new homes available for purchase in builders’ inventories at the end of the month and includes units in pre-construction, under construction and completed projects. A healthy new home market should have nine to 12 months of inventory, but November’s inventory is sitting at about three to four months.
