In March, the GTA’s housing supply challenges caused record-breaking prices, unprecedented inventory lows and skyrocketing condo apartment sales, according to the Building Industry and Land Development Association (BILD).
The supply of new homes available to buyers dropped to a record low, with only 10,153 homes available for sale across the entire GTA, according to Altus Group, BILD’s official source for new-home market intelligence. This number is down by more than 50 per cent year-over-year, as in March 2016, there were 21,006 homes available to buyers.
“The ongoing decline in new housing inventory is a direct reflection of how difficult it is for the industry to bring product to the market. The hurdles builders face keep getting higher,” said Bryan Tuckey, BILD president and CEO, in a press release. “There are ongoing major challenges with a lack of serviced and permit-ready developable land and out of date zoning bylaws. The complexity and time it takes to get the vast numbers of approvals and permits necessary to build have increased dramatically in recent years.”
March 2017 marked the biggest month for sales of new condominium apartments in the GTA with 4,500 units sold. Until last month, May 2016 held the record for most condo units sold with 3,820 sales.
“The record number of condominium apartment sales in March was boosted by recent launches of product in prime locations – more than half of March sales were in projects opened in February or March,” said Patricia Arsenault, Altus Group’s executive vice president of research consulting services. “Demand continues to be fueled by end-user buyers who are shifting their expectations towards more attainable product, as well as by investors whose presence will help ensure a steady stream of new rental housing supply in the years to come.”
Almost 80 per cent of the new homes purchased in March in the GTA were condo apartments in high-rise and mid-rise buildings and stacked townhomes. The climbing condominium apartment sales stood in sharp contrast to sales for new single-family ground-oriented homes, of which there were only 1,175 sold in March, a decline of 45 per cent year-over-year.
Prices of available condominium apartments in high-rise and mid-rise buildings and stacked townhomes climbed 14 per cent annually to $532,792, with an average price per square foot of $666, and an average unit size of 800 square feet.
Meanwhile, the available supply of new single-family low-rise homes, including detached, semi-detached and townhomes, has fallen sharply since 2007. In March 2017, there were only 932 new low-rise homes available to buyers in builder inventories, compared to 17,854 homes available one decade ago.
The scarcity of supply is especially seen in single-family detached homes, which has seen supply drop by 98 per cent over the last decade. Last month, there were 233 detached homes available for purchase, compared to 11,802 in March 2007.
“The inventory numbers are telling us very clearly that not enough new housing and not the right mix of housing is being built to keep up with consumer demand or our housing needs,” added Tuckey. “The industry is following the province’s intensification policy and building and selling far fewer low-rise homes than a decade ago, but demand for single-family homes has not dropped.”
The average price for available new low-rise homes in March was $1,124,600, a 32.4 per cent increase compared to one year ago. Meanwhile, the price for available new detached homes reached $1,783,417, an increase of $716,711 in one year.
