Photo: James Bombales
The Toronto new condo market has been one of the few good-news stories for the Canadian housing market in an otherwise rocky 2018. But its low-rise counterpart hasn’t fared nearly as well.
The average price of a new Toronto home dropped 1.5 percent year-over-year in October, according to Statistics Canada’s (StatsCan) New Housing Price Index.
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That drop was fueled almost entirely by the new low-rise home market, which has been struggling all year. The benchmark price for a single-family home fell 8.4 percent over the past year, according to data from the Altus Group, released by the Building Industry and Land Development Association (BILD) last month.
“Tighter mortgage regulations as well as provincial interventions, mostly targeting the Toronto and Vancouver housing markets, have likely contributed to the slowdown in new home prices in these historically expensive [cities],” reads the StatsCan report.
The report also noted that the pace of construction on new low-rise homes fell 40.3 percent year-over-year in October, which several industry associations, including BILD, have suggested is due to a lack of supply.
In fact, October was the best month for new condo sales this year — while they were down 44 percent year-over-year, they were just 1 percent below the 10-year average. Meanwhile, the benchmark price for a new condo was up 14.5 percent year-over-year to $775,537.
It’s a trend that Shaun Hildebrand, president of real estate research firm Urbanation, expects will continue in 2019.
“The condominium market has performed exceptionally well during its transition from an overheated 2017,” he wrote in an analysis of condo prices last month. “Low supply and stabilized demand should continue to provide structural support for prices.”
Construction began on a record 8,150 new condos in third quarter of 2018, bringing the total number of condo units under construction to a new high of 67,581.