March was a quiet month in the new home market in the Greater Toronto Area (GTA), says the Building Industry and Land Development Association (BILD).
Sales are down relative to both last March and the 10-year average, according to new figures released Tuesday (April 24).
There were 1,960 total new home sales in March, according to Altus Group, BILD’s official source for new home market intelligence.
That’s including 1,649 condominium apartments sold in low, medium and high-rise buildings, stacked townhouses and loft units, which was down 67 per cent from March 2017 and 21 per cent from the 10-year average.
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March condominium apartment sales were below underlying demand levels, said Altus Group’s EVP of research consulting services Patricia Arsenault.
“Some of the demand that might have normally occurred this year was brought forward last year, helping to set a record year for condo apartment sales in 2017,” she said.
“After an adjustment period, we expect the monthly pace of condo apartment sales to improve.”
Single-family home sales, with 311 detached, linked and semi-detached houses and townhouses (excluding stacked townhouses) sold, were up from the 265 sold in February, but down 77 per cent from last March and down 79 per cent from the 10-year average.
This year’s new home sales numbers reflect more typical activity in the housing market after last year’s unusually strong new home sales, according to David Wilkes, BILD President and CEO.
Last year was the fourth strongest year for new home sales in the GTA since Altus Group started tracking in 2000.
“This year, the cumulative effects of government measures to cool the housing market are likely keeping many potential buyers out of the housing market,” said Wilkes.
“Many may simply be taking a wait-and-see approach.”
In March, the benchmark price for new single-family homes decreased slightly to $1,207,832, which was 7.4 per cent above last year, and the benchmark price for new condominium apartments continued to rise to $742,801, which was 39.4 per cent above last March.
Behind the increase in condo prices is the fact that the benchmark unit size has increased to 900 square feet from 800 square feet a year ago, while the benchmark price per square foot has increased to $825 from $666 last year.
Low supply of new housing helped keep prices high.
The supply of both condo apartments and single-family homes dipped again in March, with total new home remaining inventory at 12,457 units, comprising 8,756 condominium apartments and 3,701 single family homes.
Based on the pace of sales in the past 12 months, this is about four months’ worth of inventory, while a healthy new home market would have nine to 12 months’ worth of inventory.
“If we want to see more housing that people can afford, we need to address this region’s housing supply problem,” said Mr. Wilkes. “And for that to happen, we will all need to work together to remove barriers to development, which include outdated zoning that doesn’t support intensification, miles of government red tape, and lack of critical infrastructure.”
Here’s the regional breakdown of new home sales for March:
Source: Altus Group