GTA inventory low as new home sales slow
August 30, 2017
The inventory of new homes in the Greater Toronto Area (GTA) remains at record lows while prices nudge all-time highs and new home sales slump, according to an analysis of Canada’s biggest housing market by Building Industry and Land Development Association (BILD Toronto).
There were 1,752 new home sales in July, according to Altus Group, BILD's official source for new-home market intelligence. These sales are significantly reduced from a year ago, well below the ten-year average, and down from the brisk pace of recent months.
BILD President and CEO Bryan Tuckey cautioned against reading too much into the dip in sales.
"July is typically a slow month and many builders wait until fall to launch developments and bring product to market. We are not seeing an increase in unsold product sitting on the market," said Tuckey, adding, "in fact we are seeing new housing supply continue to shrink from what are already depleted levels.”
In July, builder inventories in the GTA dropped to 7,801 units, another record low. A year ago there were 16,900 new homes available to buyers in the GTA.
While the number of low-rise single-family homes, which includes detached and semi-detached houses as well as townhomes, increased by about 100 homes to 1,713, the supply of new condo apartments in high-rise and mid-rise buildings and stacked townhomes dropped to 6,088 units. A year ago there were 15,298 of these types of homes available to buy.
The average price for new low-rise single-family homes in July was $1.31 million, up from June's $1.25 million, and 45 per cent higher than a year ago when the average price was $906,508.
Meanwhile, the average price of available new condo apartments in the GTA was $665,041 in July—a 40 per cent increase from a year ago and up $38,000 from June's average price.
Sales of new condo apartments were down from the record high volume of recent months, but the 1,615 units sold were still four per cent above the ten-year average for July sales.
|Patricia Arsenault, of Altus Group:
"You can't buy what isn't there.”
|- Altus Group
Condo apartments accounted for 92 per cent of July's new home sales in the region. Sales of low-rise single-family homes were down dramatically. There were only 137 sales recorded last month, which is the fewest seen in decades in the GTA.
“You can't buy what isn't there,” said Patricia Arsenault, Altus Group's executive vice president of research consulting services. “There are typically few new home project openings in July and this year was no exception.”
Tuckey expressed confidence that new home sales would recover in the early fall, which is traditionally a strong season for sales and new product launches.