Photo: James Bombales
Back in June 2006, those in the market for a brand new low-rise home somewhere in the Greater Toronto Area (GTA) had 16,560 houses to choose from. Last month, inventory levels sunk to a record low of just 2,064 of these dwellings.
This is one of the stats the Building Industry and Land Development Association (BILD) is using to explain massive price gains in the GTA’s new low-rise home market following the latest monthly release of sales figures and prices from Altus Group, a real estate analytics firm.
In June, the average asking price of a new low-rise home (which includes detached and semi-detached dwellings as well as townhouses) in the GTA was $887,543, soaring 13 per cent from what it was a year earlier, according to Altus Group.
The increase works out to more than $100,000 in a year, emphasizes BILD, which has partnered with Altus Group to release the monthly residential real estate numbers.
In a statement accompanying the data release, Michelle Noble, BILD’s marketing and communications vice president, further underscored supply-and-demand fundamentals driving prices ever higher.
“The price of low-rise homes has grown exponentially as supply has dropped,” says Noble. “Supply of new low-rise homes has declined dramatically in the last 10 years due to government policy and lack of available serviced land.”
Nowhere is supply more limited than in the detached-home category. Throughout the entire GTA, 1,002 new detached homes were available for an average price of $1,061,388. There were 10,823 a decade earlier, with average prices at the time running at $442,420.
In June, buyers snapped up 1,674 new low-rise homes, down 31 per cent from that month last year and bringing the year-to-date total to 11,132.
The same supply constraints facing house hunters in the market for a low-rise dwelling don’t exist when it comes to new high-rise housing in the GTA. There were 16,363 new high-rise condo units for sale in June 2016, while 10 years ago inventory totalled the 13,408 units.
Sales for this housing type last month equalled 2,492, a year-over-year decline of 14 per cent that brings the number of transactions from January to the end of June to 13,121.
With more robust supply, condo price growth has been flatter, although prices still reached record levels in June. At $469,516, the average price of a high-rise unit in the GTA last month had increased 6 per cent over June 2015. The average was $314,370 a decade ago.
Toronto proper saw 1,612 new condos sell, the highest total of any local GTA market last month. Durham Region was where the most low-rise homes sold, with transactions totalling 625.
“Demand for ground-related homes is far outpacing supply, with some projects selling out just hours after launching,” says Noble.