More and more buyers priced out of the new condo market
By Newinhomes on Jan 29, 2018
The Building Industry and Land Development Association (BILD) released its new home sales report for December 2017 along with some totals for the year, announcing strong sales amidst declining inventory.
There were 44,143 new home sales in the Greater Toronto Area (GTA) in 2017 according to Altus Group, BILD’s trusted source for new home market intelligence. This is the fourth highest year of sales since 2000 (when Altus started collecting data).
The three higher years were 2002, 2011, and 2016, the former being the highest with 53,660 sales!
Of the total sales in 2017, 82.5% (36,429) were condos, which means there were only 7,714 new single-family home sales last year. This is the lowest amount of annual new single-family home sales since 2000.
In December, there were 844 new condo sales and 159 new single-family home sales for a total of 1,003 – a small fraction of the 2,905 sales in December 2016.
“Low inventory and escalating prices across the board are behind the highs and lows of the sales numbers we saw in 2017,” says David Wilkes, BILD’s new President and CEO. “Our industry wants to build new homes to increase the housing supply in the GTA, but we need municipalities to work with us to expedite the process by simplifying the development approval process, updating zoning by-laws to align with provincial policies, and servicing developable land with critical infrastructure.”
As of the end of December 2017, there were 11,397 new units available across the GTA, which is 13.2% lower year-over-year and a whopping 60.3% below a decade ago. Only 3,481 of these units were single-family homes, which is 74.4% lower than 10 years ago.
“As the GTA prepares for unprecedented growth, we must get this right to ensure the region continues to be one of the most dynamic and vibrant places to live,” adds Wilkes. “We are calling on governments at all levels to ensure that people who choose to live in the GTA can afford to purchase a new home.”
While sales and inventory dropped, the average price of a single-family home increased 23.2% to $1,225,774. The average price of a new condo surged 41.3% to $716,772.
“While many end user buyers have been looking to the new condominium apartment sector for more affordable homes, some are now starting to be priced out of this segment as well,” says Patricia Arsenault, Altus Group’s Executive Vice President of Research Consulting Services.
Despite more buyers getting priced out of the new condo market, it remains the most affordable entry to the world of homeownership.
