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New home sales in GTA plunge, prices soar in July
8/25/2017 | Posted in GTA Real Estate by Paul DeAdder | Back to Main Blog Page
Despite a dramatic year-over-year drop in sales volumes of newly constructed home in July, prices in the Toronto region rose, with the industry association saying it expects a record year.
There were 85 per cent fewer single-family homes sold in July compared to the same month last year, according to the Building Industry and Land Development Association (BILD).
But the cost of a detached, semi-detached or townhouse averaged about $1.32 million, a 45 per cent year-over-year increase.
Condos, which accounted for 92 per cent of new home sales in July, also rose in price by 40 per cent to an average of $665,041.
The cost per square foot of an apartment or stacked townhome averaged $764, up from $594 last July.
Condos also got bigger, averaging 871 sq. ft., compared to 801 sq. ft. a year ago.
While the number of condos sold was down 35 per cent year over year, the year-to-date sales volume has actually increased 51 per cent and is double the 10-year sales average as more consumers look to condos as an affordable way to get into the housing market.
That's a stark contrast to the 50 per cent year-to-date decline in new single-family home sales, said BILD vice-president of communications Michelle Noble.
But she cautioned against reading too much into the year-over-year July dip.
“June sales were exceptionally strong and 2017 is on pace to be a record year for the sale of new homes, driven primarily by the sale of condo apartments in high-rise and mid-rise buildings and stacked townhomes,” she said.
“New home sales are largely driven by what product is available for buyers to purchase. We have an ongoing problem with builders being able to bring product to market in the GTA due to issues such as lack of developable land that is serviced and approved," said Noble.
She said it is normal for fewer developments to hit the market in July. Developers typically target the fall.
There were 7,801 new homes on the market last month, a record low, that is down from 16,900 units last year and 28,358 10 years ago.
The new home market compares to the re-sale housing sector, which has seen month-to-month price drops since an April peak. The year-over-year price increase in July re-sale homes was 5 per cent with the average re-sale home costing $746,216.
Source: Toronto Star
