The price of a new home in the GTA continued to soar upwards in February, breaking yet another financial record.
A new report from the Building Industry and Land Development Association (BILD) released on Wednesday revealed that the benchmark price of new single-family homes in the GTA hit $1,858,713 in February -- a staggering 35.3% annual increase. And it wasn't just houses that soared to new heights. Condos did as well, hitting a new benchmark price of $1,177,739 last month.
“GTA benchmark new home prices set record highs in February in both the single-family and condominium apartment sectors,” said Edward Jegg, manager of research consulting at Altus Group, who provided data for the report. “Low available inventory, particularly for single-family homes, continues to exert upward pressure on prices.”
In fact, last month, remaining inventory for single-family homes was the lowest it's ever been with just 546 homes available. Interestingly, total remaining inventory was up slightly compared to January, with 9,165 units on the market. This is largely thanks to several new condominium apartment projects that opened last month, BILD says. But despite the uptick, there are still only three month's worth of total inventory based on average sales for the past year -- much lower than the nine to 12 months of inventory that a balanced market would typically have.
This lack of inventory didn't slow down the total number of sales, though, with 3,630 new homes purchased in February -- 17% above the 10-year-average. The majority of these sales -- 3,048 of them -- came from condo apartment units, including condos in low, medium and high-rise buildings, stacked townhouses, and loft units. These sales were up 78% year-over-year and were 67% above the 10-year average. New single-family homes accounted for the remaining 582 sales, which was actually 54% below the 10-year average.
With demand remaining high and inventory staying low, there's no clear end in sight for the increasingly unaffordable housing market. BILD President and CEO Dave Wilkes warns that these conditions could push more and more people away from the GTA, resulting in a negative economic outlook for the region.
“The steep increases in benchmark prices that we have seen over the last few years reflect our region’s critically low supply of new homes,” he said. “If this trend continues unchecked, we are all going to feel the effects, as more and more families make the difficult choice to leave the GTA in search of housing and our region loses out on economic growth, jobs and tax revenues. Now is the time for all parties to come together and act decisively to address our housing supply and affordability crisis.”