Photo: James Bombales
The new home supply in the GTA market is less than half of what it was 10 years ago, with November seeing only slightly more new homes on the market than this past August, the current record holder for the lowest level ever reported.
According to the latest monthly figures from the Building Industry and Land Development Association (BILD), this persistent lack of supply is driving up prices for new detached homes and high-rise condos in the GTA.
Using data provided by market intelligence firm Altus Group, BILD reported that the average price of a new condo in the GTA hit $493,137 in November, up 10 per cent from the same month last year. The average price of a new detached home hit $1,230,961 in the GTA, rising a whopping 27 per cent from November 2015. BILD, which represents land developers in southern Ontario, says that prices for new detached homes have gone up by more than $258,000 in the GTA since the beginning of the year.
The BILD and Altus Group data comes on the heels of an RBC report published this week that found housing affordability is now deteriorating at a faster rate in the GTA than in the sizzling Greater Vancouver Area market. Greater Vancouver, however, remains the country’s most unaffordable housing market.
Builder inventory in the GTA sank to 15,184 homes in November. By comparison, new home inventory in November 2006 was 31,150 total homes. Patricia Arsenault, Altus Group’s Executive Vice President of Research Consulting Services, says November’s inventory was the lowest level recorded for the month since the firm started tracking this data in 2000.
And while low-rise inventory, which dropped to 2,036 units in November, is continuing to sit at record low levels, Arsenault says it’s not entirely to blame for the GTA’s difficult inventory picture.
“The low inventory story is not only about low-rise – high-rise inventories have been on a downward path over the past 3 years,” says Arsenault in a press release.
Despite low inventory levels, 2016 year-to-date new home sales levels have surpassed those seen in the previous two years. A total of 43,651 new homes have been sold in the GTA in 2016 between January and November, with high-rise picking up the slack from new low-rise sales.