The price of a new low-rise home in the GTA has more than doubled since 2006
By Lucas on Jul 22, 2016
The Building Industry and Land Development Association (BILD) released its new home sales figures for June 2016, announcing a decrease in sales and inventory as well as record high pricing.
There were 4,166 sales in June across the Greater Toronto Area (GTA), which is 22% lower than the previous year. New low-rise sales dropped 31% with 1,671 sales and there were only 2,492 high-rise sales, which is a 14% year-over-year decrease.
Sales have dropped, but that’s only part of the bigger picture. Inventory levels are still dropping. In total, there was just 18,427 new homes available across the GTA as of the end of June. 10 years ago, that number was 29,968 units. Low-rise inventory has dropped to near record lows of 2,064 and high-rise units decreased to 16,363.
In June 2006, there were 16,560 new low-rise homes available in the GTA and 13,408 high-rise units. It’s not surprising to see more condo units available in 2016 because of the lack of developable land.
"Supply of new low-rise homes has declined dramatically in the last 10 years due to government policy and lack of available serviced land," explains Michelle Noble, BILD Vice President of Marketing and Communications. "Demand for ground-related homes is far outpacing supply, with some projects selling out just hours after launching.”
A decade ago, there were 10,823 detached homes available in the GTA. As of the end of June 2016, there were only 1,002. The average price of a new detached home has jumped to $1,061,388, which is way more than double the June 2006 average of $442,420.
In general, the average price of a new low-rise home has more than doubled. The average in June was $887,543, and in June 2006, the average was just $393,398. For all new low-rise homes, average prices have gone up more than $100,000 over the last year.
In the high-rise market, prices are also hitting record highs but prices are rising in a slightly more steady manner. The average price went up 6% compared to last year, hitting $469,516. That’s still 1.5 times higher than the 2006 average. Also, the price per square foot went up to $587, which is a record high.
So, there are less sales, homebuyers are spending more money and have less choice, projects are selling out in hours or days, and there’s no sign of slowing down. Where is the GTA’s market headed?
