Canada's Condominium Magazine
There is no mistaking the rising urgency in tone in the voice of the Building Industry and Land Development Association (BILD). The new-housing supply crisis in the GTA is not only “unprecedented,” it is now “almost inconceivable.” BILD president Bryan Tuckey said in his latest statement on new home sales in Toronto that the number of new homes for sale reached unprecedented levels of scarcity in February, with just 1,001 new low-rise homes in builder inventories at the end of the month. That includes single detached, semi-detached, and townhomes. A decade ago there were 17,304. According to Tuckey, the industry is building more mid- and high-rise housing, in accordance with government intensification policy, but consumer demand for low-rise homes has not dropped.
At the end of February, there were just 324 new detached homes available for purchase in the GTA, a number he called “almost inconceivable.” In fact, according to Altus Group, BILD’s official source of market information, year-to-date sales of low-rise homes are down 23 per cent compared to last year. A total of 1,541 new low-rise homes sold in February. This was still above the ten-year average of 1,406, however, and represents the fourth-highest February for sales in ten years.
The price of the average low-rise home was up 30 per cent and now stands at $1,081,103. Single-detached homes, on the other hand, set a new price record of $1,469,449. Altus Group executive vice president of research and consulting put the situation in perspective. “If I were shopping for a single-family home ten years ago, I would have been able to choose from among 500 different sites and nearly 18,000 units. Today there are less than 100 projects with any available units to purchase, totalling only about 1,000 units. And I would have to act very quickly to get one of those.”
If I were shopping for a single-family home ten years ago, I would have been able to choose from among 500 different sites and nearly 18,000 units. Today there are less than 100 projects with any available units to purchase, totalling only about 1,000 units. And I would have to act very quickly to get one of those.
The shortage of single-family ground-related housing is leading to record-breaking condo sales, says Tuckey. Compared to low-rise homes, condo sales are soaring. February sales were up 79 per cent over last year, and year-to-date sales are up 67 per cent. February sales came in at 3,542. The previous high for February was in 2011, when 2,165 units sold. The ten-year average for new condo sales in the month of February is 1,527. In 2016, the number of sales reached 1,983. Thanks to the high number of condo sales, February’s total new home sales were the highest in ten years (5,083), as were the year-to-date sales for 2017 (7,382). The ten-year average for January-February sales is 4,806.
The cost of a new condo was up 15 per cent over the previous year, reaching $523,087. Inventory for condos was ten times that of low-rise housing types at the end of February, though that inventory continues to drop as well, and hit a new low of 10,342 units.
Bryan Tuckey called the severity of the monthly figures for February “jarring,” saying that the data show that legislative guidelines and planning policies “have real impacts on real people.” The GTA housing market is in crisis, he says, and governments need to work with the building industry to address the problems.