The Building Industry and Land Development Association released its monthly new home market results for September 2018, reporting an uptick in sales activity across the Greater Toronto Area.
According to data from Altus Group, BILD’s trusted source for new home market intelligence, there were 1,747 new home sales in the GTA in September 2018, which is significantly more than the 974 sales in August 2018.
Condo sales dominated with 1,494 transactions, but this is still 20% below the same period last year and the 10-year average. That leaves 253 new single-family home sales, which is 28% lower than September 2017 and a whopping 77% below the 10-year average.
“It appears more buyers—and builders—are starting to come in from the sidelines,” says Patricia Arsenault, Altus Group’s Executive Vice President, Data Solutions. “The increase from August in both new condominium apartment sales and the number of units in new projects launched was somewhat stronger than the typical September bump alone would suggest.”
In August 2018, there were only two new home openings in all of the GTA. September was a different story with 10 new condos and seven single-family communities opening. New home inventory jumped to 13,952 units (8,820 condo units and 5,132 single-family units).
While the increase in inventory is good, BILD points out that the new condo inventory is only about five months worth of supply, based on the last 12 months of sales trends. BILD says a healthy market should have nine to 12 months of supply.
The average price of a new condo last month was $789,643, which is 19.4% higher than the same period last year. The average price for a new single-family home fell 7.1% year-over-year to $1,119,533.
Though the price of a new single-family home is decreasing, the average remains above $1.1 million, making it unaffordable for many buyers in the GTA. The high price continues to push more buyers to the new condo market, which puts strain on the available supply, causing prices to rise.
“In the lead-up to the municipal elections, BILD succeeded in raising housing supply and affordability as major election issues,” says David Wilkes, BILD President & CEO. “Now we look forward to working with our municipal partners to address the barriers that stand in the way of building the housing our region needs to accommodate growth. Some straightforward steps include making sure that government charges on new homes are fair, funding and building critical infrastructure, cutting red tape and speeding up building permits and inspections.”