Photo: James Bombales
The month after Ontario’s Fair Housing Plan was announced in April, new listings flooded the Greater Toronto Area’s resale market as sales nosedived and even prices, until then recording seemingly unstoppable growth, fell.
But supporting what some observers have already noted, numbers from Altus Group released today suggest the 16-point policy move’s impact on the new-construction market wasn’t so dramatic.
“For the new homes market, the Province’s Fair Housing Plan has had little real effect,” says Bryan Tuckey, CEO of the Building Industry and Land Development Association (BILD), an industry group that publishes Altus Group data each month.
“Prices continue to increase and supply, especially for single-family low-rise homes, continues to be low,” Tuckey adds.
For low-rise homes in general, builders were asking an average of $1,222,699 in May, an increase of roughly $10,000 from the month before and up 40 per cent from exactly a year before.
Specifically, the average asking price was $1,942,316 for detached homes and $919,231 for semi-detached dwellings. And — for the first time on record — townhouses had an average asking price of over $1 million, squeaking past that milestone by $2,220.
The building industry often points to supply as the main root of the region’s affordability woes, and of the 10,820 new homes for sale in May, just 1,414 were low-rise single-family homes.
Overall supply is well shy of the 19,209 new homes on the market in May 2016 and is a drastic departure from the 29,754 available a decade ago, when 16,420 were low-rise single-family homes.
A vast majority of new, available homes were condo units, yet asking prices for this housing type soared 33 per cent annually to an average of $604,683 in May.
“The price acceleration in the condo portion of the market is especially worrisome since it not only represents the lion’s share of new housing in the GTA, it’s also making it difficult for condos to remain the affordable option.”
That condos are the only affordable housing type for many GTA buyers creates built-in demand which partly explains price gains in that segment, one economist recently told BuzzBuzzNews.
Out of 3,902 new home sales recorded in May, 3,357 were high-rise condo sales and 545 were low-rise home sales.
So far this year sales activity is on pace to reach a record high. Buyers have snapped up 22,814 new homes from January to May, with roughly 75 per cent of those being condo units.