GTA new homes prices shatter record in March as market faces new government regulations

Credit: financialpost.com

The price of a new available detached home in the Greater Toronto Area soared to $1.78 million in March, jumping about 67 per cent in one year and sending people scurrying into the condominium market which had record sales last month.


According to the Building Industry and Land Development Association, the number of new homes available to buyers continued to drop to unprecedented levels.


“The ongoing decline in new housing inventory is a direct reflection of how difficult it is for the industry to bring product to the market,” said Bryan Tuckey, chief executive of the group. “There are ongoing major challenges with a lack of serviced and permit ready developable land and out of date zoning bylaws. The complexity and time it takes to get the vast numbers of approvals and permits necessary to build have increased dramatically in recent years.”


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His comments come after the province introduced 16 measures to deal with affordability in the region, including a 15 per cent on foreign investors buying in the Greater Golden Horseshoe. The province has promised rules to make it easier for developers to get projects going but many have complained new measures do not address the Ontario Municipal Board where those same builders say they face major delays for hearings.


Across the GTA, there were 10,153 homes available to buyers in builder inventories, according to Altus Group, BILD’s source for new-home market intelligence. The available builder inventory has dropped by half in just one year. A year earlier, there were 21,006 homes available to buyers.


The available supply of new single-family low-rise homes, which includes detached, semi-detached and townhomes, dropped to 932 at the end of March. A decade ago there were 17,854 available homes on the market. The supply of single-family detached homes was off 98 per cent from a decade ago with just 233 available across the region compared to 11,802 in March, 2007.


“The inventory numbers are telling us very clearly that not enough new housing and not the right mix of housing is being built to keep up with consumer demand or our housing needs,” said Tuckey. “The industry is following the province’s intensification policy and building and selling far fewer low-rise homes than a decade ago, but demand for single-family homes has not dropped.”


Supply shortages have been felt as demand remains strong with the average price for an available new low-rise homes at $1,124,600 in March, up more than $40,000 from February and 32.4 per cent from a year ago. The price for available new detached homes was $1,783,417 in March, an increase of $716,711 from a year earlier.


Demand is now focusing on condo apartments which had set a record in GTA sales at 4,500 in March. May, 2016 was the previous record for condos at 3,820.


“The record number of condominium apartment sales in March was boosted by recent launches of product in prime locations – more than half of March sales were in projects opened in February or March,” said Patricia Arsenault, executive vice president of research consulting services with Altus Group “Demand continues to be fuelled by end-user buyers who are shifting their expectations towards more attainable product, as well as by investors whose presence will help ensure a steady stream of new rental housing supply in the years to come.”


gmarr@postmedia.com

twitter.com/dustywallet




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