After an "all time low" month for GTA new home sales in July, sales fell to new depths in August, posting a mere 464 transactions — a new"historical low," according to the Building Industry and Land Development Association (BILD).
“August’s new home sales data paints a stark picture of a housing market that is struggling with deep structural issues that have made the cost to build too high," says Justin Sherwood, SVP Communications & Stakeholder Relations at BILD. "A key component of those costs are the excessively high government taxes and fees, which add, on average, $355,000 to the cost of an average single family new home in the GTA."
It's these high costs that have pushed August's numbers 46% below August 2023 and a significant 73% below the 10-year average. Of the units sold, 235 were condominium apartments, constituting a 61% year-over-year decrease and putting us 81% below the 10-year average — dramatic decreases due largely to the Toronto and the GTA's stalled condo market. New single-family homes sales were slightly better off at 299 transactions, posting a year-over-year decline of 14%, but still 56% below the 10-year average.
Despite historically low sales, new home remaining inventory dipped slightly in August, going from 21,660 units in July to 21,296 units. This includes 17,233 condominium apartment units and 4,063 single-family dwellings, representing a high inventory level of 14.5 months. However, BILD notes that this high inventory level isn't indicative of a boom in new build releases, but rather the result of extremely low sales. "This is an unhealthy situation, because as interest rates decrease, sales will return but it will take longer for new building to recover, setting up a future supply/demand imbalance," reads the media release.
In fact, new housing starts declined 24% in urban centres like Toronto from July to August, according to the Canada Mortgage and Housing Corporation.
“The crisis is real and will be reflected – in the next several years by – fewer jobs, fewer new homes and compounded affordability challenges. We are calling on municipalities across the GTA, supported by the provincial and federal governments to take immediate steps to address the fundamental challenges facing our industry by controlling and lowering the charges on new home construction," says Sherwood. "There is no greater issue facing our region than housing and we all have a responsibility and opportunity to take bold steps to change the channel on the affordability challenges facing our region”
The new benchmark price for new condominium apartments is $1,031,356, down 5% over the last 12 months, and $1,598,852 for single-family homes, down 7%.
