New home sales in the GTA climbed in March over the month prior, as the market begins to show signs of life, according to the latest data from the Altus Group and the Building Industry and Land Development Association (BILD).
Although monthly figures show upward movement, new home sales are still down significantly year-over-year, 70 percent below March 2022 levels and 65 percent below the 10-year average.
There were 1,277 new home sales in March, including 893 condominium apartments (including low/medium/high-rise buildings, stacked towns and lofts) and 384 single-family homes (including detached, linked, semi-detached and non-stacked townhouses).
In recent months, higher interest rates and a permeating sense of economic uncertainty compelled buyers to take a wait-and-see approach, but now buyers are transitioning back to the market, as is reflected in current sales activity.
“Sales of new homes may have been muted for the past few months due to short-term market conditions, but demand will inevitably return as GTA families resume looking for the homes they need,” said Dave Wilkes, BILD president & CEO.
Remaining new home inventory was 14,479, declining slightly from February, but still running much higher compared to last March, when inventory was at record lows, thanks to surging demand propped up by a low interest rate environment.
The remaining new home inventory was split between 12,887 condominium apartment units and 1,592 single-family units, translating into 10.5 months and 6 months of inventory respectively. Inventory target for a balanced market is 9-12 months.
Month-to-month benchmark prices increased across housing types in March, with an average of $1,799,971 for new single-family homes and $1,117,867 for new condominium units.
These figures represent a modest month-to-month increase but are down year-over-year with the benchmark price for single-family homes falling 2.1 percent and the benchmark for new condominium apartments falling 10.8 percent in the last 12 months.
Despite a sluggish year to date, there is optimism for the upward trend to continue, with demand returning in the GTA and stability in interest rates coaxing buyers from the sidelines, which is likely to create momentum in the market.
“Overall, the new home market remains poised for an upswing as inventory levels are robust and pricing crawls higher,” said Edward Jegg, research manager with Altus Group. “With interest rates holding fast and the resale market strengthening, buyers have begun to re-emerge from the sidelines.”
