After seeing a massive leap between August and September, new home sales in the GTA essentially flatlined in October, with 1,872 sales recorded.
That figure is down around 0.7% month over month and 7% year over year. It’s also 50% below the 10-year average for new home sales in the region.
New condominium apartments (including units in low-, medium-, and high-rise buildings, as well as stacked townhouses and loft units) accounted for the bulk of sales activity in the month, with 1,304 units sold. That figure is up 1% month over month, but down 20% year over year and 49% below the 10-year average.
Just 568 new single-family homes (including detached, linked, and semi-detached houses, and townhouses, but not stacked townhouses) were sold last month, marking a month-over-month slip of 4.5%, but a year-over-year rise of 47%. Still, sales ended up 51% below the 10-year average.
“October new home sales eased across the GTA while inventory levels continued to climb,” explains Edward Jegg, Research Manager with Altus Group — BILD’s official source for new home market intelligence.
“Builders are testing the waters with new launches, gauging whether buyers are ready to re-engage.”
As Jegg calls attention to, inventory across the GTA is up almost 10% from September, with 21,032 new units coming online last month. That figure includes 17,930 condominium apartment units and 3,102 single-family dwellings.
“This is the first time since 2016 that inventory levels have exceeded 21,000 units and represents a combined inventory level of eight months, based on average sales for the last 12 months,” says the report.
“A balanced market has nine to 12 months of inventory. Remaining inventory includes units in pre-construction projects, in projects currently under construction, and in completed buildings.”
Justin Sherwood, Senior Vice President for BILD, says that it was an atypical October, with more buyers “sitting on the sidelines” compared to previous years.
“This is entirely driven by the current monetary policy, interest rates, and affordability erosion caused by the rising cost of living,” Sherwood also says. “Delays in pre-construction sales means delays in adding housing supply and the impacts of slower sales will be lower future housing starts. The sooner the market gets indications that more moderate interest rates are on the horizon, the sooner we will see more added housing supply. ”
Tuesday's report also reveals that prices are relatively downcast, with the benchmark prices for new condominium apartments ($1,023,102) and new single-family homes ($1,629,245) down 10.8% and 10.3%, respectively, over the last 12 months.
