The Building Industry and Land Development Association (BILD) has released its November 2015 sales figures for the Greater Toronto Area’s (GTA) new housing market, announcing that the average price for a low-rise home has hit yet another record high, according to RealNet Canada.
The average price for a new low-rise home as of the end of November 2015 was $818,354, which is a staggering 17% higher than the same period last year when the average was $700,779. Looking back a decade, the average price of a new low-rise home was only $388,805.
"Prices in the low-rise market have more than doubled in the last 10 years," says BILD president and CEO Bryan Tuckey. "This significantly reduces the average buyer's ability to afford a new low-rise home in the GTA."
There were 1,800 low-rise sales across the GTA in November, bringing the inventory down to 4,669 homes. This inventory level is 73% lower than 2005’s inventory of 17,311 homes.
"The GTA has less than three months of inventory remaining," Tuckey says. "It is critical that we have an adequate supply of serviced land designated for development so that we can continue to build quality, complete communities that people can afford and want to purchase."
In the high-rise market, the average price saw very little year-over-year change, actually seeing about a 1% decrease from $449,371 to $446,981. The average size of a high-rise unit is also dropping. In November 2015, the average size decreased 4% to 772 square feet, and back in 2005, the average was 901 square feet.
"While average prices of high-rise suites has not changed, the price per square foot continues to grow," Tuckey says. "To keep the price of new condominiums within reach for new-home buyers, the industry has found creative ways to reduce the overall size of suites while maximizing living space."
The average price per square foot in the new high-rise market went up 4% to $579. This is a surprising 74% higher than a decade ago when the average price per square foot was $333. There were 2,053 high-rise sales in November.
"Our member companies continue to find new and innovative ways to build new homes that are affordable for new-home buyers amidst a price surge fueled by constrained supply of serviced land designated for development," Tuckey explains. "It is a challenge because constrained supply has resulted in fewer new homes being brought to market, which means demand is far outpacing supply, particularly in the low-rise market."
Will there be a surge in low-rise inventory in 2016? Will high-rise prices continue to drop?