Photo: James Bombales
As new condo sales in the Greater Toronto Area were breaking records in February, the supply of new low-rise homes fell to an unprecedented level for the region.
Bryan Tuckey, the President and CEO of the Building Industry and Land Development Association (BILD), an industry group representing GTA home builders, calls it a “housing supply crisis” and says it’s getting worse.
Tuckey’s comments come as BILD, along with its market data source, Altus Group, published GTA new home sales and price statistics for February, which saw new low-rise inventory fall to 1,001 homes by the month’s end. The low-rise housing category includes single-detached, semi-detached and low-rise townhomes.
Single-detached homes available to GTA buyers numbered only 324 at the end of February. To illustrate just how much market composition has shifted to the high-rise segment, BILD and Altus Group point out in a media release that there were 12,064 new detached homes available to buyers in February 2007.
The February 2017 data, released Thursday, also saw condo apartment and stacked townhome sales in the GTA rise 79 per cent over the previous year to 3,542. This figure is more than double the 10-year average and twice the number of sales recorded in the low-rise segment during the same period. There were 1,541 new low-rise sales in February, down 18 per cent from the previous year.
BILD points the finger at Ontario’s growth policies as a key driver of the shift to high-rise home building, and the reason why low-rise supply continues to sink.
“Our members are building to current provincial intensification policy and we are building less low-rise single-family housing and more high and mid-rise housing but consumer demand for low-rise homes has not dropped,” says Tuckey, in a media release.
“Today in the GTA we have a scarcity of single-family ground-related housing that is not just unprecedented — it is almost inconceivable. As a result we are seeing record breaking condo sales and continued price growth.”
The average price of a new GTA condo apartment was a record-setting $523,086 in February, up three per cent from the previous month and 15 per cent from February 2016. New condo supply also dropped to 10,342 units, a new low for the segment, according to BILD and Altus Group.
On the low-rise side, the average price rose a mammoth 30 per cent over the previous year to set a new record at $1,081,013. New detached homes also hit a new high at $1,469,449, up 47 per cent year-over-year.
“While the February results point to a trend decades in the making, the severity of the monthly figures, is jarring,” says BILD’s Tuckey.
“As the current data demonstrates, legislative guidelines and planning policies have real impacts on real people. With significant declines in builder inventory and record prices (for both low and high-rise homes), the GTA housing market is in crisis and it is time for governments to work with us to address the problems.”