In February, the prices of new homes in the GTA showed few signs of abating, the Building Industry and Land Development Association (BILD) announced today.
A satellite image of the GTA. Image via NASA.
The benchmark price for condominium apartments in low, medium and high-rise buildings, stacked townhouses and loft units rose again in February, to $729,735, which was 39.5 per cent above last February, according to Altus Group*, BILD’s official source for new-home market intelligence. The benchmark price for available new single-family homes, including detached, linked and semi-detached houses and townhouses (excluding stacked townhouses), dropped slightly from $1,229,454 in January to $1,219,874, but was still 12.8 per cent above last February’s price.
“Tight supply continues to drive pricing levels,” said David Wilkes, BILD President and CEO. “This is especially true when it comes to the pricing of single-family homes.”
Although the new home market saw a modest increase in supply in February, to 12,896 units, comprised of 9,285 condominium apartments and 3,611 single family homes, supply is still well below what is considered a healthy level. Supply of new housing is typically measured by the number of new homes available for purchase in builders’ inventories at the end of the month and includes units in pre-construction, under construction and completed projects. A healthy new home market should have nine to 12 months’ worth of inventory, and right now inventory is at about four months’ worth, based on the pace of sales in the past 12 months.
GTA Home Prices by Municipality. Data by Altus Group. Image via BILD
“While single-family new home inventory is up from last year, it is still quite low in historical terms,” said Patricia Arsenault, Altus Group’s Executive Vice-President, Research Consulting Services. “Moreover, there is a dearth of new single-family product that is affordable to a broader range of buyers – fewer than one in five single-family homes available to purchase at the end of February were priced below $750,000.”
Sales of new homes in the GTA rose in February from January, with 2,159 new homes sold, but remained soft relative to the very strong sales recorded last February. Sales of new single-family homes were down 82 per cent from last February and 79 per cent below the 10-year average, with 264 units sold in February. Sales of condominium apartments were down 50 per cent from last February but still 17 per cent above the 10-year average, with 1,895 units sold.
Mr. Wilkes said that government regulation is a significant factor influencing the industry’s ability to increase the supply of new housing in the GTA. “We encounter excessive red tape, out-of-date zoning, and lack of developable land serviced with critical infrastructure,” he said. “That is why, as the municipal elections approach, we’ll be initiating public conversations about ways policy makers, urban planners, our industry and residents can work together to address the GTA’s housing supply challenge.”