Healthy sales of new homes in March contributed to a solid first quarter performance for the new housing market in the Greater Toronto Area, reports the Building Industry & Land Development Association (BILD).
According to RealNet Canada Inc., BILD’s official source of new home market intelligence, there were 3,434 new homes and condos sold in March 2011 and a total of 9,374 units sold from January to March, down 8.5 per cent year/year. The decline in total Q1 sales is fully attributable to weakness in the low-rise, 905 housing market, reflecting the very constrained low-rise land supply.
“Last year, we experienced the new home sales equivalent of March madness as 4,569 new homes were snapped up by homebuyers in a single month. The 3,434 new homes sales in March of this year, albeit down 25 per cent year/year, represents a healthy but much more stable level of activity,” said BILD president and CEO Stephen Dupuis.
“While the demand side remains strong, the interplay of factors like the HST and the new mortgage financing rules are certainly keeping the froth factor at bay as the new housing market moves into a state of sustainable equilibrium,” he added.
As for the first quarter as a whole, RealNet Canada President George Carras pointed out that high-rise sales held pace with Q1/2010 thanks in part to the $75,000 price differential compared with low-rise. The current high-rise price index sits at $446,965 compared with a staggering $522,034 for low-rise product.
“You can’t sell what you don’t have,” Carras explained, noting that as of March 31, 2011, there was only 5.5 months of supply of low-rise new homes. “Active new home inventories are well below the long-term average levels.”