Declining new condo affordability ‘amplified’ typical summer slowdown
By Newinhomes on Aug 23, 2018
The Building Industry and Land Development Association released its Greater Toronto Area new home statistics for July 2018, reporting the typical summer slowdown everyone was expecting.
According to BILD’s trusted source for new home market intelligence, Altus Group, there were 1,071 new home sales last month, which is 44% lower than the same period last year and 55% below the 10-year average.
“New home sales in the GTA typically take a breather in the summer months compared to the spring,” explains Patricia Arsenault, Altus Group’s Executive Vice-President, Data Solutions, in a press release. “This July was no exception, although minimal new project launches in July, along with declining affordability of new condominium apartments due to recent price escalation, amplified the June-to-July decline in sales somewhat this year.”
855 of the sales were new condos, which is a 52% drop year-over-year and 40% under the 10-year average. That leaves 216 new single-family home sales; this doesn’t sound like a lot but it’s actually 85% higher than July 2017, which reported the lowest number of sales in decades. Single-family home sales may be up on a year-over-year basis, but compared to the 10-year average, the number of sales is still down 77%.
The average price of a new condo in July 2018 was $774,759, jumping 16.5% compared to a year ago. This is mostly unchanged from June 2018. The average price of a new single-family home remains above $1 million, finishing July at $1,142,574. This is still high for most buyers, but it’s actually 13.2% lower than July 2017’s average price.
New home inventory dropped with just 14,784 units available across the GTA. 9,931 are condo units and the other 4,853 are single-family homes. It’s not surprising to hear inventory fell slightly considering only two projects launched last month.
“We are still seeing a shortfall in condo apartment inventory,” says David Wilkes, BILD President & CEO. “Given the current pace of sales, we should have nine to 12 months worth of inventory, but we only have five. We expect that more condo apartment product will become available in the fall.”
“The prices of new homes are affected by, among other factors, the fees, taxes and charges added by all levels of government,” he adds. “Municipalities have the most direct influence over affordability and supply of new housing, so leading up to the October 22 municipal elections, we are inviting people to send an email to their local candidates, asking them to make housing a priority. Start by visiting www.buildforgrowth.ca.”
We happen to know about a few exciting new home projects planning to launch this fall, so we’re still confident that the GTA’s new home market will pick up steam in the second half of 2018.
