New home sales in the Greater Toronto Area hit a 23-year low in January as high interest rates kept prospective buyers on the sidelines.

According to a new report from the Building Industry and Land Development Association (BILD), only 567 new homes were sold across the GTA in January, the lowest level for the month since tracking began in 2000.

The dwindling figure, courtesy of data from Altus Group, marks an annual decline of 81% and is 70% below the 10-year average.

"New home sales started 2023 on a very quiet note," said Edward Jegg, Research Manager at Altus Group. "Developers, particularly in the condominium apartment sector, continue to bring new units to the market though buyers remain largely hesitant."

Single-family home sales saw a similarly slow start to the year, with just 186 units changing hands in January. As with new home sales, the figure marks the lowest sales level for the month in 23 years.

Accounting for detached, linked, and semi-detached houses, as well as townhouses, single-family home sales were down 70% year over year in January, and sit 78% below the 10-year average.

The benchmark price for new single family homes dropped to $1,730,359 in January, a 2.3% annual decline, while the price of new condominium apartments fell 2% year-over-year $1,127,192.

Sales-wise, condominium apartments saw their lowest January level in 14 years. Including units in low, medium, and high-rise buildings, as well as stacked townhouses and lofts, just 381 units were sold last month, an annual decline of 84% and 64% below the 10-year average.

On a positive note, total new home inventory increased to 13,490 units in January, the highest level in two years. The jump was thanks in part to the launch of two large condo projects, with the housing type accounting for nearly 11,900 of the available units.

The GTA now has 7.5 months of condo inventory and 4.8 months of single-family inventory; a balanced market would have nine to 12 months of inventory.

"We are seeing a modest increase in inventory, due to prospective home buyers sitting on the sidelines as a result of current monetary policy," said Dave Wilkes, President and CEO of BILD.

"But given the rate at which the population of the GTA and the province is growing, we need to build 1.5M new homes in Ontario in a decade. We are committed to working with all levels of government to implement the changes necessary to meet this ambitious goal."