The Building Industry and Land Development Association (BILD) just released its new home sales figures for March 2016, announcing that the average price of a new detached home in the Greater Toronto Area (GTA) has surpassed $1 million for the first time ever.
According to Altus Group, BILD’s trusted resource for new home intelligence, the average price of a new detached home in the GTA was $1,045,659 in March 2016, which is 21% higher than the same period last year and more than double the average 10 years ago. In March 2015, the average was $861,848 and in 2006 it was at $439,294.
BILD President and CEO Bryan Tuckey says that the rapidly rising price of detached homes is due to the industry not meeting the strong demand for detached living, government intensification policies, and a lack of serviceable land.
"The demand for detached homes is far outpacing supply as the GTA's population continues to grow," says Tuckey. "Our region has record-low levels of new detached homes available for sale, which drives up prices and reduces housing choice for consumers."
There was a total of 2,032 low-rise sales last March, 905 of which were detached homes. The rest are semis and townhomes. The total amount of sales for the low-rise market is 16% higher than last year and 26% more than the 10-year average. But detached home sales are down 9% and 3% below the 10-year average.
"New low-rise homes are being purchased faster than they can be brought to market," Tuckey adds. "As long as demand for low-rise homes continues to outpace supply, we will continue to see rapid price growth."
As of March 31st, there were only 3,036 new low-rise homes available across the GTA, which is a record low. 10 years ago, there were 16,757 new low-rise homes available at this time. Of the 3,000, about half (1,634) are detached homes. At the end of March 2006, there were 11,149 detached homes available.
The average price for a new low-rise home also hit a record high, reaching $849,312, which is 15% above the same period last year. The average price of a new townhome was $672,419 and the average for a semi was $612,487.
Don’t be surprised if even more first-time homebuyers turn to the high-rise market where prices aren’t rising as quickly, but even some of these units remain unaffordable. The average price in the high-rise market went up 2% to $459,231, while the average price per square foot jumped 4% to $582. How many first-time homebuyers are looking at condo units priced higher than $450,000?
There were 1,560 sales in the high-rise market, which is 22% lower than last year and 12% below the 10-year average. That’s a significant year-over-year decrease. It could mean that even the high-rise market is getting too pricey for most young buyers.