The new condo market’s performance in October was slightly more reminiscent of spring 2020 than a typical busy fall season, as sales sank 32 percent from the previous year.
The new Toronto region data, published today by the Building Industry and Land Development Association (BILD), arrived as several GTA regions, including the city itself, entered their first week of a lockdown that’s sure to further impact home sales.
While October’s sales decline was nowhere near as dramatic as April’s 80 percent collapse, it was emblematic of the new condo market’s struggles in the face of heightened restrictions, a sluggish condo resale market and investor uncertainty.
But just like the spring season, new condo prices remained robust, with the benchmark price hitting $990,880, a nearly 19 percent increase from a year ago.
Altus Group, BILD’s data provider, noted that there were a large number of new condo launches in October, but acknowledged sales volume was lower than past fall seasons, which is usually the busiest time of the year outside of the spring months.
Altus Group’s Ryan Wyse pointed to new pandemic-induced procedures around new home sales that have led to challenges around condo launches and the pace of sales that’s possible with the new restrictions in place.
“Virtual tours and signings and by-appointment sales offices have allowed the market to continue operating during the pandemic. However, sales launches have changed — instead of crowds at opening, we are seeing a shift to appointments over a longer period of time,” said Wyse.
The major bright spot in the BILD and Altus Group October data was new single-family home sales, which saw sales jump 44 percent and prices rise 12.7 percent to $1,211,141.
Much like the resale market, new single-family home sales have outperformed their new condo counterparts during the recovery period that followed the spring shutdown. While single-family sales activity in October did not match the triple-digit increases seen in August and September, this cooling likely reflects pent-up demand from the spring running its course and giving way to conditions that are more typical of a busy market.
There’s an element of seasonality as well, with this past August in particular being unusually busy for new home sales. October 2019 was already a relatively busy month, so the increases seen last month were less likely to be as pronounced when compared to gains seen in the typically quieter late summer period.
BILD President David Wilkes took a broader view of the state of the new home market, noting that sales in 2020 so far are higher than the same January to October period in 2019.
“When we look at the overall numbers so far in this very unusual year, it’s clear that the demand for the homes our industry builds is not going anywhere,” said Wilkes.
“In spite of the challenges brought on by the pandemic, year-to-date new home sales in the GTA are up 11 per cent compared to the same period last year and two per cent above the 10-year average, demonstrating not only the resilience of the housing market in the GTA, but also the role that our sector will play in economic recovery.”
