New home prices continue to skyrocket as inventory drops
By Lucas on Dec 22, 2016
The Building Industry and Land Development Association (BILD) released its new home sales figures for the Greater Toronto Area (GTA) for November 2016, announcing that the lack of supply has continued to drive prices upwards.
According to Altus Group, BILD’s trusted source for new home market intelligence, there were only 15,184 new homes available in the GTA as of the end of November, which is a mere 84 units more than the record low we saw last August. Rewind 10 years and compare this inventory level to the 31,150 new homes available in November 2006.
“The low inventory story is not only about low-rise – high-rise inventories have been on a downward path over the past 3 years,” says Patricia Arsenault, Executive Vice President of Research Consulting Services at Altus Data Solutions. “Total available inventory in November was the lowest November level we have seen since we first started to track this data in 2000.”
There were 13,148 new high-rise units available and just 2,036 new low-rise, 789 of which were detached. Based on current sales trends, there’s less than two months of supply of new low-rise homes.
With inventory hitting record lows, prices have been reaching new heights. The average price of a new condo unit in the GTA went up 10% year-over-year to $493,137. The average size also went up to 820 square feet.
The average price of a new detached home increased by 27% year-over-year to $1,230,961. From the beginning of 2016 to the end of November, the average price of a new detached home has gone up by $258,000. The overall average price for all new low-rise homes went up by 20% in November, hitting $977,890.
“The industry is building to government policy and building far fewer low-rise homes, especially detached single-family homes, but demand has not dropped with the supply so prices continue to increase,” explains Michelle Noble, Vice President of Communications, Marketing and Media Relations at BILD.
There were only 8,843 detached sales this year, which is 16% lower than last year and much lower than the 12,273 sales in 2006. Overall, there have been 43,651 new home sales in the GTA this year, 60% of which were high-rise units (26,299) and 17,352 were low-rise.
Will the new detached home inventory continue to drop in 2017?
