The Building Industry and Land Development Association (BILD) released its new home market report for April 2018, announcing a drop in sales and average prices.
Last month, there were 1,727 new home sales in the Greater Toronto Area (GTA), according to BILD’s trusted source for new home market intelligence, Altus Group. This is the lowest amount of sales in April in more than 20 years.
There were 502 new single-family home sales, which is 65% lower than the same period last year and 70% lower than the 10-year average. There were 1,225 new condo sales, which is also 65% lower than April 2017 and 38% below the 10-year average.
“While homebuying intentions remain strong, a combination of challenges is keeping many interested buyers out of the new home market this spring,” says Patricia Arsenault, Altus Group’s Executive Vice-President, Research Consulting Services. “First-time buyers need to save longer to qualify for a mortgage, and potential move-up buyers are faced with a bigger gap than a year ago between the price of a newly-built home and the price they can get for their existing home.”
The average price for a new single-family home fell 5% year-over-year to $1,151,815. This is also lower than the average price in March 2017, which was above $1.2 million. The average price of a new condo unit dropped from March to $739,965, but this is still nearly 30% higher than April 2017.
With a few new home openings and a drop in sales, new home inventory saw a slight jump, increasing to 14,297 units available across the GTA (with 9,958 condo units and 4,339 single-family homes).
This amount is nearly 15% higher than March 2017 and equals about five months of supply. According to BILD, a healthy GTA market has approximately nine to 12 months of new home supply available, so there’s still some work to do.
“It is obvious that government action is having an impact on demand in the new home market,” says David Wilkes, BILD President and CEO. “We have 115,000 new residents coming to the GTA every year and we need to be building 55,000 new homes annually to meet their housing needs. Government policy needs to recognize the need to increase housing supply as part of a long-term solution for our region.”