New home market continues to focus on condos, despite rising prices

New home market continues to focus on condos, despite rising prices

Greater Toronto, July 26, 2018 – In June, new condominium apartment sales in the GTA continued to outpace new single-family home sales, despite another rise in the benchmark price of condo apartments and a slight softening in the prices of single-family homes, the Building Industry and Land Development Association (BILD) announced today.

Condominium apartments in low, medium and high-rise buildings, stacked townhouses and loft units accounted for 2,079 of the 2,500 total new home sales in June, according to Altus Group*, BILD’s official source for new home market intelligence. That was 61 per cent below record-setting June 2017—a month that saw 5,290 condos sold, the highest number ever—but only 17 per cent below the 10-year average. The benchmark price of condominium apartments rose to $774,554, which was 23.5 per cent above last June.

Sales of new single-family homes, including detached, linked and semi-detached houses and townhouses (excluding stacked townhouses), with 421 units sold, were down 19 per cent from last June and down 71 per cent from the 10-year average. The benchmark price of new single-family homes, at $1,132,957, was down 9.4 per cent over the last twelve months.

“The relative strength of condo apartment sales is an indication of the state of the market,” said David Wilkes, BILD President and CEO. “The cost of new homes in the GTA, both condos and single-family homes, is affected by government regulation and red tape that slows down the building of new supply, and by government fees, taxes and charges, which can account for almost a quarter of the cost of a new home.”

Mr. Wilkes said the Association’s Build for Growth campaign leading up to the Oct. 22 municipal election is encouraging people to write to their candidates asking them to make housing a priority and to address factors that affect the affordability and supply of new housing in the GTA. The campaign asks that municipalities keep fees, taxes and charges on new homes fair, fund and build critical infrastructure, cut red tape and adopt a Standard of Service Excellence for building permits and approvals. Voters can send their letters at buildforgrowth.ca.

Thanks to a number of new condominium apartment openings in June, remaining inventory for condos increased to 10,335 units, while the remaining inventory for single-family homes increased slightly to 4,848 units. Remaining inventory includes units in preconstruction projects, in projects currently under construction, and in completed buildings.

“The industry and buyers continue to focus on the relatively more affordable condominium apartment sector,” said Patricia Arsenault, Altus Group’s Executive Vice-President, Research Consulting Services. “Fourteen new condominium apartment projects were launched in the GTA last month, the second highest number for June yet recorded by Altus Group, and buyers snapped up almost half of the new units by month-end. In a typical June, closer to one-third of new units are sold by month-end.”

June New Home Sales by Municipality**:

Source: Altus Group

*Altus Group should be credited as BILD’s official source of new home market intelligence.

**Historical data are subject to revisions.

Source: BILDGTA.ca