New high-rise sales booming in the GTA as the new low-rise supply dwindles
By Lucas on Jun 21, 2016
The Building Industry and Land Development Association (BILD) just released its new home sales figures for May 2016, announcing that new high-rise sales are surging due to the shrinking new low-rise inventory.
According to Altus Group, BILD’s trusted resource for new home market intelligence, there were 3,623 high-rise sales across the Greater Toronto Area (GTA) in May. Altus Group also singled out two openings in Vaughan and Ajax that helped boost sales numbers.
This number of high-rise sales is a shocking 76% increase compared to May 2015 and is nearly double the 10-year average of 1,896. The only other month on record to have more high-rise sales is November 2011.
“The industry is following the Province’s Growth Plan intensification policies which emphasize high-rise development in the GTA,” says BILD President and CEO Bryan Tuckey. “Nine out of 10 of the new homes available for sale in the GTA are high-rise and mid-rise condominiums.”
“Healthy levels of condo supply, combined with creative suite designs that maximize each square foot of space, have helped keep homeownership within reach for the many buyers who have been priced out of the low-rise market,” Tuckey adds.
10 years ago, the new high-rise inventory was 13,334 units; as of the end of May, the GTA had 17,224 units available. The average price of a new high-rise unit has risen healthily by 3% to $454,304. On a per square foot basis, the average price also went up 3% to $573.
“A shortage of serviced developable land in the region is significantly reducing the supply of new low-rise homes brought to market and helping drive up prices,” explains Tuckey.
New low-rise inventory hit a record low, falling below 2,000 for the first time with only 1,985 homes available across the GTA. Compare this supply to 2006 when the new low-rise inventory was sitting at 16,420.
Since the new low-rise inventory is still dropping, prices continue to rise aggressively. The average price for a new low-rise home in the GTA hit yet another record high of $875,154. The average price of a detached home remains above $1 million at $1,125,988.
With many homebuyers being priced out of the new home market, new low-rise sales have dropped. There were only 2,091 sales last month, which is 15% lower than the same period a year before.
With no sight of a surge of new low-rise inventory, it’s looking like affordability will continue to be an issue for the rest of 2016.
