GTA Construction Report staff writer
In the GTA new home market, 2017 was a year of declining inventory, high prices and strong sales, setting a record high in new condo apartment sales and a record low in single-family home sales,the Building Industry and Land Development Association (BILD) reported in late January..
Overall in 2017, there were 44,143 new homes sold in the GTA, according to Altus Group, BILD’s source for new home market intelligence. That makes 2017 the fourth strongest year for new home sales in the GTA since Altus Group started tracking in 2000. Only 2002, 2011, and 2016 had stronger new homes sales, with 2002 being the highest at 53,660 units sold.
Of the new homes sold in 2017, 82.5 per cent (36,429 units) were condominium apartments in low, medium and high-rise buildings, stacked townhouses and loft units, the highest number of condo apartments sold in any year in the GTA, while 17.5 per cent (7,714) were single-family homes, including detached, link, and semi-detached houses and townhouses (excluding stacked townhouses), the lowest number sold since Altus Group started tracking in 2000.
“Low inventory and escalating prices across the board are behind the highs and lows of the sales numbers we saw in 2017,” said David Wilkes, BILD’s new president and CEO. “Our industry wants to build new homes to increase the housing supply in the GTA, but we need municipalities to work with us to expedite the process by simplifying the development approval process, updating zoning bylaws to align with provincial policies, and servicing developable land with critical infrastructure.”
Supply of new housing is typically measured by the number of new homes available for purchase in builders’ inventories at the end of the month and includes units in pre-construction, under construction and completed projects. At the end of December 2017 there were 11,397 new homes available for purchase, down 13.2 per cent from 13,136 at the end of December 2016 and 60.3 per cent below the 28,739 new homes available 10 years ago.
Since Altus Group began tracking in 2000, the total inventory at the end of each month has typically been between 20,000 and 30,000 units. For more than a year and a half now, it has been below 20,000 units.
The decline in single-family home inventory has been even more dramatic. At the end of December 2017, there were 3,481 new single-family homes available for purchase, down 74.4 per cent from 10 years ago.
New home prices rose again in December 2017, with the benchmark price for available new single-family homes at $1,225,774, which was 23.2 per cent above last December’s benchmark price of $995,116. Meanwhile the benchmark price for available new condo apartments was $716,772 in December, 41.3 per cent above the December 2016 benchmark price of 507,128.
“While many end user buyers have been looking to the new condominium apartment sector for more affordable homes, some are now starting to be priced out of this segment as well,” said Patricia Arsenault, Altus Group’s executive vice-president of research consulting services.
Wilkes said BILD will be raising issues of housing supply and affordability as the municipal elections approach this fall.
“As the GTA prepares for unprecedented growth, we must get this right to ensure the region continues to be one of the most dynamic and vibrant places to live,” he said. “We are calling on governments at all levels to ensure that people who choose to live in the GTA can afford to purchase a new home.”