The Building Industry and Land Development Association released its new home sales figures for May 2018, reporting another significant increase in new condo prices.
Last month, the average price of a new condo unit in the Greater Toronto Area was $758,370, which is 25.4% higher than a year ago.
BILD says a large contributor to the rising average price is the increase in average unit size; up to 892 square feet compared to 814 square in May 2017. With the average price per square foot year-over-year increase from $743 to $850, a few square feet can make a big difference.
This is a sign of buyers continuing to look to the new condo market as an affordable alternative to new single-family homes. The average size is increasing because people are considering staying in their condo longer and possibly raising children.
It’s a different story in the new single-family home market where prices dropped 6.4% year-over-year to $1,144,191. Though the average price dropped, prices are still high enough to push buyers to the new condo market.
“It is doubtful prices will continue to moderate, considering embedded government fees, taxes and charges, and high land costs due to regulatory constraints,” said David Wilkes, BILD President & CEO, about new single-family homes.
“Leading up to the October 22 municipal elections, as part of our Build for Growth campaign, we will be putting forward a four-point plan on how municipalities can help tackle the issues of housing supply and affordability in the GTA,” he adds. “We are encouraging residents to send letters calling for action on these issues to their candidates for municipal office.”
Sales were strong for new condos, ending the month with 2,003, which is just 1% below the 10-year average. May 2017 saw a record high of 3,766 new condo sales, so year-over-year, sales were down 47%.
New single-family home sales dropped 33% year-over-year with 342 for the month of May. This is a whopping 78% lower than the 10-year average.
“May new condominium apartment sales were very encouraging,” says Patricia Arsenault, Altus Group’s Executive Vice-President, Research Consulting Services. “Not only was it the strongest month since last November, but the sales of 2,003 units are impressive in historical terms: there have only been five other years where May new condominium apartment sales topped this year’s performance.”
New condo supply dropped with only five new projects opening in May, adding 710 units. As of the end of last month, there were 9,345 new condo units available in the GTA. Single-family home supply increased slightly to 4,505 units.
Typically, sales and prices are up in spring – it doesn’t look like that happened this year, so it will be interesting to see what activity is like through summer!