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Although new home sales in the Greater Toronto Area were up in June, the Building Industry and Land Development Association (BILD) says sales have dipped “significantly below” the 10-year average.

According to BILD, there were 2,526 new home sales in the GTA in June, up 32 per cent from last June but 30 per cent below the 10-year average.

“There is no doubt that the recent escalation in interest rates is pushing some prospective new home buyers to the sidelines,” Dave Wilkes, the president and CEO of BILD, said in a written statement.

In an effort to curb inflation, which peaked at 8.1 per cent last year, the Bank of Canada introduced a series of interest rate hikes beginning in March 2022. Earlier this month, the central bank raised its key interest rate again by 25 basis points, bringing the benchmark rate to five per cent.

“Rising interest rates also delay the addition of much-needed supply to the market, because pre-construction sales are a crucial element in financing new housing,” Wilkes said.

“Thus, when the Bank of Canada continually raises interest rates, it is exacerbating Canada’s housing supply and affordability crisis.”

According to BILD, condo apartments, including low, medium, and highrise buildings, stacked townhouses, and loft units, account for 1,957 units sold last month. That is an 11 per cent increase from June 2022 but a 21 per cent decrease from the 10-year average.

There were 569 single- family homes sold in June, up 256 per cent from June 2022 but 49 per cent below the 10-year average.

The benchmark price for a new condo was 1,090,484 in June, down 8.4 per cent over the last 12 months, while the price for a new single-family home was $1,716,467, down 6.9 per cent of the last year.

“New home sales took a step back in June,” said Edward Jegg, research manager at Altus Group, which provides BILD with housing data.

“Increased supply eased pressure on prices but buyer hesitancy has returned.” 

Source: CP24