Demand for newly-constructed GTA homes kicked the new year off with a bang, as January new home sales came in a whopping 47% above the 10-year average. A total of 2,853 units sold last month, according to the Building Industry and Land Development Association (BILD), marking an 18% year-over-year increase. Activity is also up 4.1% from December, which in of itself was the second-strongest on record. Altus Group, BILD’s official data source, says January’s sales volume is the highest in 19 years.
New condo units were the main driver of demand, with a total of 2,274 sold (including the low-, medium-, and high-rise segments, as well as stacked townhomes and lofts). That’s 113% above the 10-year average, and 40% above the previous high recorded in 2017.
Read: GTA New Condo Sales Soar 40% Above 10-Year Average in 2021
However, sales fell among low-rise home types (including detached, semi-detached, and linked single-family homes and non-stacked townhomes), as short supply constrained demand. Just 579 units sold, down 33% from the 10-year average, BILD notes.
This effectively softened new construction prices in the short term; the data reveals the benchmark price for a single-family home has decreased $57,931 from December (-3.1%), while benchmark price for condo units dipped by $13,239 (-1.1%).
Year over year price performance, however, is up strongly: single-family prices rose 30% from January 2020 to $1,771,162, while condo prices rose 12.7% to $1,150,685.
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Edward Jegg, Analytics Team Leader at Altus Analytics, Altus Group, says strong performance in the condo sector is reflective of a resurgence in interest in living in the 416, following an initial slowdown at the start of the pandemic, and that fresh supply helped bolster sales activity.
“January provided further evidence that, despite earlier pandemic-related disruptions, the City of Toronto remains an attractive location for new condo apartment investors and end user buyers,” he says. “Strong sales at the large number of recently opened City of Toronto projects boosted overall GTA new condo sales to their highest January ever. New single-family home sales, however, continued to be weak across the GTA, plagued by record low inventory.”
Indeed, the condo sector received a welcome influx of inventory from the opening of nine new projects last month, increasing overall the number of available units to 8,333. However, that adds up to just 2.9 months of inventory, woefully short of the 9-12 months required in order to be considered a balanced market. In fact, today’s supply conditions are reminiscent of the shortage experienced in 2017, coming within 1,000 units of that low, and less than half of the inventory available during the 2011-2016 period.
Read: Where is Toronto’s New Condo Market Headed in 2022?
The supply situation is even more dire in the single-family segment, as inventory hit fresh lows in January with just 550 homes available -- 10% below pre-pandemic 2019 levels and well below the 15,000-unit average between 2000-2009. BILD says these units include those at the pre-construction and active construction stages, as well as completed buildings.
“One needs to look no further than the strong demand and our weakening inventory numbers to know we have a housing supply crisis in the GTA,” said Justin Sherwood, BILD’s Senior VP of Communications and Stakeholder Relations. “That is why BILD has welcomed the recent report from Ontario’s Housing Affordability Task Force and why we support its 55 recommendations to address the housing supply and affordability challenge in Ontario and the GTA.”
