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New home sales fall victim to new lending restrictions

GREATER TORONTO, Nov. 21, 2012 - Stricter lending restrictions have led to a drop in consumer confidence and affordability, causing new home sales to decline for the third consecutive month, the Building Industry and Land Development Association (BILD) reported today.

According to RealNet Canada Inc., BILD's official source of new home market intelligence, 2,792 new homes were sold in October, which is the second-lowest October record. Due to three low sales months in a row, year-to-date sales of 29,322 new homes across the GTA have slipped to 14 per cent below the long-term average - the third-lowest in BILD's records.

The high-rise sector still holds a prominent share of the market, with 1,914 sales in October 2012 totalling the fifth-highest October on record.

"In an attempt to cool down the market, the federal government has severely affected the building and development industry in the GTA," said BILD President and CEO Bryan Tuckey. "The introduction of stricter mortgage regulations has triggered a decline in new home sales, and if this trend continues, it will affect job creation in the coming years, restricting economic growth."

The building and development industry plays a key role in the economic prosperity of the GTA and the Province of Ontario. Last year alone, the industry created 193,300 jobs and paid $10.1 billion in wages.

Tuckey added that first-time home buyers are those most affected under the new rules, which have taken a considerable portion of potential purchasers out of the market.

The RealNet New Home Price Index for a low-rise home rose 16 per cent over October 2011 to $616,623 while pricing for high-rise homes increased 2 per cent to $439,328.

BILD will continue to monitor this trend as new projects enter the market in the coming months.

A statistical backgrounder can be found here. Contact Andrei Zaretski at azaretski@bildgta.ca or Amy Lazar at alazar@bildgta.ca for more information.

Oct '12

Low Rise

High Rise

Total

Region

2010

2011

2012

2010

2011

2012

2010

2011

2012

Durham

156

252

214

9

10

12

165

262

226

Halton

300

364

98

199

127

36

499

491

134

Peel

213

503

275

136

71

233

349

574

508

Toronto

123

75

13

2,627

1,983

1,426

2,750

2,058

1,439

York

569

437

278

413

877

207

982

1,314

485

GTA

1,361

1,631

878

3,384

3,068

1,914

4,745

4,699

2,792

Jan-Oct

13,655

15,207

12,758

17,464

23,814

16,564

31,119

39,021

29,322

Source: RealNet Canada Inc.

With more than 1,375 members, BILD, formed through the merger of the Greater Toronto Home Builders' Association and Urban Development Institute/Ontario, is the voice of the land development, home building and professional renovation industry in the Greater Toronto Area.  BILD is proudly affiliated with the Ontario and Canadian Home Builders' Associations.

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For further information:
Amy Lazar
Manager, Communications
416-391-3452 or 416-543-3903
alazar@bildgta.ca

Andrei Zaretski
Manager, Marketing & Media Relations
416-391-3450 or 416-843-4898
azaretski@bildgta.ca