The climate of erratic prices and soaring interest rates that beset the Greater Toronto Area (GTA) housing market in 2022 resulted in the lowest level of new home sales the region has seen in four years.
According to a new report from the Building Industry and Land Development Association (BILD), just 25,400 new homes were sold across the GTA last year, the lowest level since 2018. The figure, courtesy of data from Altus Group, is 29% below the 10-year average.
Sales of new singly-family homes suffered significantly, with only 4,483 units changing hands in 2022. Accounting for detached, linked, and semi-detached houses, as well as townhouses, the figure is 64% below the 10-year average.
With 20,917 units sold in 2022, sales of condominium apartments -- units in low, medium, and high-rise buildings, stacked townhouses, and loft units -- were 12% below the 10-year average.
"GTA new home sales started strongly in 2022 before easing in the second half of the year with annual sales sitting at a four-year low," said Edward Jegg, Research Manager with Altus Group. "However, prices steadied in December after months of declines as buyer demand and builder supply were more closely aligned."
After four and five months of decline, respectively, the benchmark price for new single-family homes and new condominium apartments rose month-over-month in December. Ending the year at $1,753,356, single-family home prices were down 4.2% annually, while condo apartments, at $1,131,614, were down 2.8% from a year ago.
Although prices had found some stability by year-end, buyers and sellers remained hesitant. December saw only 563 new home sales, the second-lowest level for the month since tracking began -- only recession-plagued December 2008 saw lower sales levels. Accounting for 398 of the homes sold, condo apartments also experienced their second-lowest sales level on record for the month of December.
On a monthly basis, the total remaining inventory of new homes dropped to 13,320 units in December, nearly 11,600 of which are condos. The GTA now has 6.6 months of condo inventory and 4.6 months of single-family inventory; a balanced market would have nine to 12 months of inventory.
"The hesitation new home buyers showed in the latter half of 2022 was no doubt largely the result of continued high interest rates and tightening monetary policy," said Dave Wilkes, BILD President & CEO.
"With interest rates at the top of the cycle, the further 2% imposed by the minimum qualifying rate will almost certainly prove to be an insurmountable hurdle for thousands of new home buyers trying to finalize financing this spring. The federal government needs to reconsider its approach to monetary policy so families can purchase the homes they need without artificial obstacles."
