The Building Industry and Land Development Association (BILD) released its monthly new housing figures for March 2017, announcing a record high number of condo sales across the Greater Toronto Area (GTA).
According to Altus Group, BILD’s trusted source for new home market intelligence, there were 4,500 condo sales in March 2017, shattering the previous record of 3,820 which occurred in May 2016. 80% of the month’s sales were in the new condo market.
“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,” says 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.”
While condo units remain the more affordable option, prices are still rising at a rapid rate. Jumping 14% compared to the same period last year, the average new condo price hit $532,792. The average price per square foot reached $666 and the average condo unit size was 800 square feet.
It’s not surprising to see this surge in condo sales. Like Arsenault mentions, the condo market simply has more attainable options. The average price in the new low-rise market hit $1,124,600, which is a 32.4% year-over-year increase and a whopping $40,000 higher than the average in February 2017. Looking at just the new detached home market, the average price hit $1,783,417, which is $716,711 higher than one year ago.
“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,” says BILD President and CEO Bryan 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.”
As of the end of March, there were only 932 new low-rise homes available across the GTA. 10 years ago, there were 17,854. Out of these low-rise options, only 233 were detached, which is a 98% drop from a decade ago. There were just 1,175 new low-rise sales in March, which is 45% lower than last year.
“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,” says Tuckey. “The hurdles builders face keep getting higher. 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.”
Many buyers and those in the industry were thinking that spring would bring a welcomed increase in inventory, but it doesn’t seem to be the case. New releases are selling out in a matter of hours or over the course of a weekend. Demand is stronger than ever and there seems to be no sign of slowing down.