On the heels of the second-best December ever recorded for home sales in the Greater Toronto Area activity slowed in January, but it’s not a sign of waning demand, suggests the Building Industry and Land Development Association (BILD).
There were 1,614 new-construction homes purchased across the GTA last month, a 22 per cent plunge from January 2015. BILD, a development industry group, attributes the significant drop to a lack of new inventory coming to market.
“While the number of new projects launched in January was similar to last year, the number of actual units in these projects was significantly lower,” says Bryan Tuckey, BILD’s president and CEO, in a statement.
“You can’t sell what you don’t have, so fewer new homes brought to market means fewer sales,” he continues.
In January, 1,379 new homes hit the market, down from the 2,011 units made available to buyers in the same month the year before, according to RealNet, the analytics firm that supplies BILD with its new home data.
Sales declines were more pronounced in the high-rise segment. The 640 high-rise condo units that changed hands in January represent a 32 per cent fall from the first month of 2015.
In the low-rise corner of the market, which covers detached and semi-detached homes and townhouses, sales sunk to 974 units, down 14 per cent year-over-year.
The greatest number of low-rise homes were sold in Durham last month, with sales totalling 265 units, while just 98 low-rise homes were sold in Toronto. However, Ontario’s capital led the way for high-rise sales at 391 units.
The average asking price for a new low-rise home in the GTA was $822,926 in January, a 1 per cent decline from December, but up 17 per cent compared to a year prior.
For a new high-rise unit in the GTA last month, the average price also inched downwards 1 per cent from December 2015 to $449,199
BILD says the fact that condo units are getting smaller is one reason for the slight decline in price and notes that the average high-rise suite shrunk to 773 square feet in January from 796 square feet 12 months earlier.
As units got smaller, the average price per-square-foot rose 4 per cent to $581 last month, compared to January 2015, when a square foot of high-rise residential real estate cost an average of $558.
RealNet pegs remaining low-rise inventory at 4,066 units and says available high-rise supply sits at 20,431 units.
Tuckey says it’s still too soon to get an accurate gauge of how the rest of the year might play out for the Greater Toronto Area’s housing market.
“The next few months will tell a more accurate story about the market with the introduction of additional new projects across the GTA.”
Some 47,691 homes are under construction in the City of Toronto alone, according to the latest BuzzBuzzHome Market Snapshot data.
“It is important to understand that one month does not a trend make,” Tuckey says.
