There was huge growth in new home sales in the Greater Toronto Area in June, with a new report showing that the number of sales grew by 59% compared to May 2017, 23% compared to June last year, and 44% compared to the 10-year average.
The report, released by the Building Industry and Land Development Association (BILD), showed a total of 6,046 homes were sold in the GTA in June. That growth took the total number of new home sales up to 28,889 for 2017 – a notable 14% increase when compared to the same period in 2016.
The growth was fueled by a huge demand in new condos. Together with stacked townhomes, condo apartments accounted for 91% of new home sales in June. In total, 5,495 condo apartments and stacked townhomes were sold last month, marking a massive 89% increase from June 2016.
In fact, it was the highest number of new home sales ever recorded for condos – beating the previous record set in March and more than doubling the 10-year average of 2,550 units sold per month. Interestingly, York Region accounted for the majority of growth in high-rise sales, seeing an incredible increase from 222 in June 2016 to 2,266 in June 2017.
These sales numbers suggest that many people still have confidence in the Greater Toronto Area real estate market, despite recent changes that seem to have affected resale figures. BILD President and CEO Bryan Tuckey emphasized that point when he noted that:
We continue to see that the Province’s fair housing plan in effect since April has had little impact on the new home market.
The BILD report also showed increases in average prices of new homes. The average condo price rose by $22,000 from the previous month to a new high of $627,000. Based on the average size of units sold, that comes out at an average price of $745 per square foot – a 26.4% year-on-year increase.
There was also a massive increase in the average price of new low-rise family homes (including detached, semi-detached and townhomes). The average price rose by 40.9% year-on-year, reaching $1,250,262 in June. In the short term, there was a slight drop in the average price of detached homes, falling 9% from May to June to a new average of $1,761,985.
Our research into the sales figures for the Toronto Real Estate market showed that supply and demand played a large part in price changes, and the BILD report suggests supply is also affecting prices of new homes. There were only 10,820 new homes available for sale last month, compared to 18,063 in June 2016 and 30,300 in June 2007.
Once again, the figures suggest that supply is not matching the high demand for real estate in Toronto and this is helping to push prices higher. This reflects the difficulty many builders face getting new projects approved, which in-turn affects the buyers, and is an issue that needs to be addressed. BILD CEO Tuckey also raised this point and stated:
The challenges builders face including lack of serviced and permit ready developable land and out of date zoning bylaws continue to impact the supply of housing. It’s time for governments to work with the industry in order to help bring supply in builder inventories to a healthy level.
