New condo, townhome sales and prices soar in October
Sunday Nov 26th, 2017
The boom in condos and stacked townhomes pushed sales of new construction homes in the Toronto region up 18 per cent year over in year in October — accounting for 91 per cent of the overall 5,377 purchases.
The remaining 9 per cent of sales were low-rise, single-family homes, including detached, semi-detached and town houses.
A 70 per cent decline in the number of transactions in the low-rise category in October, compared to the same month last year, was accompanied by a 30 per cent increase in prices that averaged about $1.22 million.
New construction detached houses now cost $1.55 million on average, according to the homebuilders’ group Building and Land Development Association (BILD).
At the same time, condo sales climbed 70 per cent with a 40 per cent year-over-year price increase to $677,456 on average.
That translates to an average price per square foot of $791 with the size of condos averaging 857 sq. ft.
The sales and price trends are a reflection of the declining choice for home buyers, according to BILD.
"We're still not building enough homes for the demographic reality of the Greater Toronto Area. Housing choice has diminished so markedly over the last 18 months to two years, even in the high rise market, prices are continuing to go up," said CEO Bryan Tuckey.
The supply of homes available to buy at the end of the month remains at about a three- to four-month inventory level. A healthy new home market requires about nine to 12 months, he said.
When low-rise home prices started climbing between 2010 and 2015, the high-rise market provided a relief valve — homes that were still affordable to first-time buyers, he said.
Now, said Tuckey, "there's really no relief valve into another housing type.”
The situation requires urgent action to bolster supply, said Tuckey.
"The new home market is reacting differently than the re-sale market. Let's get more on to the market as quickly as possible. The demand side is not solving the problem," he said.
BILD has long cited the increase in development approval timelines as a major factor in inhibiting the construction on new housing.
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