No signs of overheating in the GTA's new home market
The beginning of fall typically marks the start of a busy season for the new home market in the Greater Toronto Area, and 2019 was no different.
According to the Building Industry and Land Development Association’s monthly new home market report, there were 3,061 new home sales across the GTA in September 2019, which is 73% higher than the same month a year ago. Altus Group, BILD’s trusted source for new home market intelligence, says this is 6% above the 10-year average.
New condo sales increased 39% with 2,107 sales in September, which is 12% above the 10-year average, while new single-family home sales went up a whopping 283% year-over-year with 954 sales. While there were many single-family home sales, the total for the month was still 5% below the 10-year average, which actually isn’t that low considering August 2019 single-family sales were 39% below the 10-year average.
“September provided additional evidence that the new home market in the GTA is recovering nicely from last year’s slump,” says Patricia Arsenault, Altus Group’s Executive Vice President, Data Solutions. “The degree of improvement in both new home sales and new project openings this year has been contained, however, and there are no signs of overheating in the market.”
August is usually slow because builders are planning openings for September and October. There were many new launches in September, bringing the new home inventory in the GTA up to 18,745 units. It’s good to see inventory increasing along with sales because the GTA is in need of more supply as more and more families choose to move to the region.
“While new home sales and inventory have been increasing, the GTA continues to experience a significant housing supply crunch,” says David Wilkes, BILD President & CEO. “We must continue to focus on the supply side of the housing equation to address this generational challenge for the long term.”
The average price of a new single-family home in the GTA in September 2019 was $1,081,175, which is 3.4% lower than a year ago. Though the average price fell slightly, most families in the GTA still can’t afford a new home priced higher than $1 million.
As the average price of a new single-family home continues to drop slowly, the average price of a new condo in the GTA has jumped once again, this time by 6.5%, hitting $841,159. If the price gap between single-family homes and condos continues to decrease, we may see some buyers deciding to save slightly longer in order to buy a single-family home instead of a condo.
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