The Building Industry and Land Development Association (BILD) released its monthly sales figures for April 2017, announcing that demand continues to outpace supply across the Greater Toronto Area (GTA), with overall inventory hitting a record low.
As of the end of April, there were only 9,387 new homes available in the GTA. This is the first time the inventory has fallen below 10,000 since BILD and Altus Group started recording new home market data more than a decade ago. Last year at the same time, there were more than 21,000 new homes on the market.
“The declining number of new homes available to purchase is not a question of less product being brought to market,” says Patricia Arsenault, Altus Group’s Executive Vice President of Research Consulting Services. “There were more than 11,000 units in projects opened in the first four months of this year – that’s about one-third higher than the average for the previous two years. But new product is selling well. For example, for projects opened in the first quarter of this year, only one in five units were still available to purchase at the end of April; for the same period in 2015, that proportion was about double (two in five).”
While supply fell, sales increased compared to last year. There were 4,680 new home sales in April, which is 7% higher year-over-year. 70% of the sales were of new condo units, while the other 30% were in the new low-rise market. In the first four months of the year, there were 17,977 new home sales, which is 24% higher than last year and 48% above the 10-year average.
“Builders are not able to keep up with the demand for new housing,” says BILD President and CEO Bryan Tuckey. “The product that builders are able to bring to the market is quickly purchased and prices for all types of new homes keep increasing as a result.”
The average price for a new low-rise home went up 40% to $1,212,297. Detached homes were obviously the most expensive with an average of $1,810,232. Semis averaged $856,036, and townhomes averaged $946,496.
The average price of condo units also went up by nearly 24% to $570,226. The average price per square foot hit a record high of $685, which is a 17.5% increase. The average unit size also went up significantly to 832 square feet.
Last month, the resale market showed signs of cooling, or at least some people believed that the market showed signs of cooling. We’re interested to see how the GTA’s new home market fares as we get closer to the summer months.