GTA new home prices sticking
March 27, 2018
Sales action may have slowed but new home prices are sticking in the Greater Toronto Area (GTA), with new detached house prices up 12.8 per cent from a year ago and condo and townhouse values up nearly 40 per cent.
"Tight supply continues to drive pricing levels," said David Wilkes, BILD president and CEO. "This is especially true when it comes to the pricing of single-family homes."
The benchmark price for new single-family homes in February was $1.21 million, down slightly from a month earlier but up from the same month last year.
The benchmark price for condominium apartments and stacked townhouses in February was $729,735 – 39.5 per cent above last February, according to Altus Group, BILD's official source for new-home market intelligence.
Although the new home market saw a modest increase in supply to 12,896 units in February, comprised of 9,285 condominium apartments and 3,611 single family homes supply is still well below what is considered a healthy level.
"While single-family new home inventory is up from last year, it is still quite low in historical terms," said Patricia Arsenault, Altus Group's executive vice president, research consulting services. "Moreover, there is a dearth of new single-family product that is affordable to a broader range of buyers – fewer than one in five single-family homes available to purchase at the end of February were priced below $750,000."
Sales of new single-family homes were down 82 per cent from last February and 79 per cent below the 10-year average, with 264 units sold in February. Sales of condominium apartments were down 50 per cent from last February but still 17 per cent above the 10-year average, with 1,895 units sold.
Wilkes said government regulation is a significant factor influencing the industry's ability to increase the supply of new housing in the GTA. "We encounter excessive red tape, out-of-date zoning, and lack of developable land serviced with critical infrastructure," he said.