GTA Housing Price Gap Hits Record High Again!

Homebuyers lining up to purchase a new low-rise home at Aurora Trails. Hundreds lined up for days. The demand is too strong!

The Building Industry and Land Development Association (BILD) released its May 2015 sales figures for the GTA new home market, announcing that the price gap between high-rise and low-rise homes continues to grow.

The average price for a new low-rise home in the GTA reached a record high of $783,955, which is 16% higher than the same period last year, according to RealNet Canada. With the average price for a new high-rise unit coming in mostly unchanged at $440,463, the price gap has hit a record high of $343,492. Not only is this a record high, but it is more than $100,000 higher than May 2014’s price gap of $237,301.

"The rapidly widening price gap is an indication that demand is far outpacing supply in this part of the market," says BILD president and CEO Bryan Tuckey. "As the price of ground-related housing continues to grow at a record pace, it's becoming increasingly difficult for GTA residents to afford a low-rise home."

The new low-rise supply is very low, coming in at 5,198 homes for sale across the GTA as of the end of May. That’s only slightly higher than April 2015’s record low inventory number. The demand for low-rise housing is so high right now that sales are outpacing high-rise units.

People lining up for a new low-rise home at Aurora Trails

Last month, there were 2,442 low-rise sales in the GTA, with the majority of the sales in Peel and York regions, while there were just 1,793 high-rise sales, which is significantly lower than last year. This same period in 2014, there were over 2,000 high-rise sales. In May 2015, there was a total of 4,235 sales in the GTA.

"The effect of new-home pricing is also trickling down to resale homes, which is something that affects all homebuyers," Tuckey adds. "As inventory borders on record low level, we need an adequate supply of low-rise homes to ensure healthy levels of housing choice that are necessary to accommodate the needs of our expanding region."

Will we see more low-rise communities launched to meet the demand? Or will prices continue to grow until more and more homebuyers are priced out of the market?