New home prices see slight decline in October

November 22, 2016

 

New home prices see slight decline in October

Greater Toronto, November 22, 2016 – October saw a modest increase in supply and mix of new homes in the GTA, as well as a slight decrease in average prices, the Building Industry and Land Development Association (BILD) announced today.

The average price of new low-rise homes, which includes detached and semi-detached homes and townhomes, was $937,689 in October according to Altus Group, BILD’s official source for new-home market intelligence. This is a $54,702 decline from September but a 17 per cent increase from this time last year. The average price per square foot was $394, a slight increase from September.

“The industry is doing what it can to provide new home buyers with ground-related choices that they can afford,” said BILD President and CEO Bryan Tuckey. “Builders brought more semi-detached homes and townhomes to market in October than in previous months and they are smaller and more affordable than single detached homes.”

Low-rise supply increased slightly from September. There were 2,282 new low-rise homes available for purchase in builders’ inventory. Despite the increase, supply levels are still a fraction of what they were a decade ago and offer less than two months of inventory based on recent purchase trends.

There were 1,621 new low-rise homes sold in October, down 10 per cent from the same time last year but above the 10-year average. Of those sold, 802 were detached homes, which is a 16 per cent decline from October 2015.

“The October numbers confirm that buyer interest in the GTA new home market continues to be strong,” said Patricia Arsenault, Executive Vice President of Research Consulting Services at Altus Data Solutions. “The additional townhouse product recently released is welcome news for those seeking more affordable low-rise options.”

Two-thirds of the low-rise sales in October took place in York and Halton regions.

There were 2,421 high-rise homes sold in October, which is down 27 per cent from a year ago, but overall high-rise sales are still on pace for a record year with 23,189 sales to date.

Prices of new high-rise homes in October declined slightly to $483,656, but that is still 10 per cent above last year’s average. The average price per square foot in the high-rise market fell to $594, a modest decrease from September but up four per cent from October 2015.

The decline in high-rise prices is due to the increasing amount of new project launches outside downtown Toronto and in other parts of the GTA where prices are lower. Ten of 15 projects launched in October were in the 905 regions compared to seven of 20 a year ago.

Supply of new high-rise homes in builders’ inventory increased slightly in October to 18,210 units. The increase came as a result of several new project launches in the GTA and mostly affected pre-construction condominiums.

“While inventory has grown slightly, it’s important to understand that one month does not a trend make and constrained supply is still a serious issue in the GTA,” Tuckey said. “What we are seeing in the market is how the development industry is implementing provincial intensification policies by building more affordable low-rise homes and a variety of high-rise communities all over the GTA.”

October New-Home Sales by Municipality:

October '16

Low Rise

High Rise

Total

Region

2014

2015

2016

2014

2015

2016

2014

2015

2016

Durham

265

325

351

32

32

119

297

357

470

Halton

208

248

523

103

196

322

311

444

845

Peel

520

487

157

85

197

150

605

684

307

Toronto

91

61

19

1,798

2,309

1,154

1,889

2,370

1,173

York

843

686

571

154

583

676

997

1,269

1,247

GTA

1,927

1,807

1,621

2,172

3,317

2,421

4,099

5,124

4,042

Jan-Oct

15,812

17,121

15,800

18,409

18,397

23,189

34,221

35,518

38,989

Source: Altus Group

With more than 1,450 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.

These results were previously released under the REALNET® Canada name, whose independent and comprehensive data, analyses and insights on the commercial real estate investment and residential development markets is collected and compiled using a nationally consistent research process established in 1995. Going forward they will be released by Altus Group, powered by a proprietary data platform led by Altus Data Solutions Canada. This team is the formal unification of leading Canadian real estate data companies previously acquired by Altus Group, including REALNET® Canada.


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A statistical backgrounder is available for viewing. For additional information or to schedule an interview, contact Andrei Zaretski, Manager of Marketing and Media Relations, at 416-391-3450 or 416-843-4898 or azaretski@bildgta.ca