No, it’s not a typo — new home prices were down month-over-month in the country’s hottest major housing market.
The average list price of a low-rise home in the Greater Toronto Area was $937,689 in October, which is $54,702 cheaper than it was in September, according to the latest data from real estate analytics company Altus Group.
Rather than waning demand, the drop is a result of the mix of new homes that builders made available for buyers, says the Building Industry and Land Development Association (BILD), a development industry group that releases monthly data from Altus Group.
“Builders brought more semi-detached homes and townhomes to market in October than in previous months, and they are smaller and more affordable than single-detached homes,” says Bryan Tuckey, president and CEO of BILD, in a news release.
“The industry is doing what it can to provide new home buyers with ground-related choices that they can afford,” Tuckey explains, though the average new low-rise home price, excluding extremes, was up 17 per cent from where it stood a year ago, according to BILD.
Buyers snapped up 1,621 new low-rise homes in October, representing a 10-per-cent decline from a year earlier, but pushing the year-to-date total to 15,800 homes, enough to remain on track for a record year.
Exactly 802 of the low-rise dwellings builders sold last month were detached, a 16-per-cent drop over that same period.
At October’s end, there were 2,282 new low-rise homes in builders’ unsold inventories, up from the 1,604 new ground-related dwellings they boasted a year earlier. If builders didn’t put any more new low-rise homes on the market, supply would sell out in under two months at the current rate of sales.
High-rise home sales plunged 27 per cent to a total of 2,421 units in October. Yet with year-to-date transactions totalling 23,189 sales to date, the segment is still on pace for a record year.
The average asking price of a high-rise unit was $483,656 having inched downwards $2,949 from September. BILD suggests the month-over-month price slump has to do with location, location, location.
New development activity is shifting to places outside of the 416 area code, which includes downtown Toronto.
“The decline in high-rise prices is due to the increasing amount of new project launches outside downtown Toronto and in other parts of the GTA where prices are lower,” says BILD.
Ten out of 15 projects launched last month were in the 905 region, which covers municipalities including Mississauga and York Region.
Twenty years ago, fewer than half of the projects launched in the GTA had addresses in the 905.