December 11, 2010
As usual, our thanks to Stephen Dupuis, President and CEO of BILD (Building Industry and Land Development Association), for the article below.
Around this time last year, I wrote about the unfair comparison between 2009 and 2008 monthly new home sales, given the different overall states of the market in those years. This time around, however, we get to compare apples to apples and, not surprisingly, total new home sales in the GTA for the month of October remained relatively unchanged from October 2009.
What has changed, however, is the balance between the high- and low-rise markets, with new condominium units claiming an astonishing 70 per cent of total new home sales in the GTA in October, according to RealNet Canada Inc., BILD’s official, independent source of new home market information.
There were 3,159 high-rise units sold across the GTA in October, up 27 per cent from last year, making it the best October for high-rise sales over the last 11 years. If there is a trend within the trend, it’s the shift in condo sales out to the 905 regions. While Toronto did account for three quarters of all sales (2,409 units), the biggest sales increases were recorded in York (particularly Markham and Vaughan) and Peel (particularly the City of Mississauga) Regions, which saw 164 percent and 138 per cent increases in high-rise sales respectively, year over year.
This speaks volumes about the demand for condo living as year-to-date figures have shown high-rise sales have increased 53 per cent from last year. This is in part due to lower average prices in the relatively affordable high-rise sector – according to RealNet, the high-rise price index sits at $424,337, which is $75,000 less than the low-rise price index.
It’s no wonder first-time buyers and move-down buyers, not to mention investors are snapping up condos across the GTA. But price isn’t the only factor behind the condominium craze. We have in the GTA a healthy supply of well located, well designed buildings, combined with lifestyle marketing which is second to none, as evidenced by the preponderance of local nominees for the pending U.S. home builder awards – the Nationals – which I spoke of last week.
In fact, thanks to the boost from the high-rise sector, this was the best October for total new home sales as well, notwithstanding the 32 per cent decline in low-rise sales. Single-detached, semis and townhomes are lagging behind in year-to-date sales as well, down 12 per cent from 2009 There are several factors surrounding the relative softness in the low-rise market, particularly the acute shortage of inventory, which is a major factor behind the fact that the low-rise price index rose through the half million dollar threshold for the first-time ever, currently sitting at $500,532.
All things considered, nearly 31,000 new homes and condos have found happy purchasers in the GTA so far this year, which is a 15 per cent improvement over 2009. That speaks to a whole lot of pending building activity, economic activity and investment and most of all, jobs, jobs, jobs.
Read previous articles by Stephen Dupuis on BuzzBuzzHome’s blog here!