New home sales in the Greater Toronto Area last month dropped off significantly from a year ago, according to the latest figures from the Building Industry and Land Development Association (BILD), but they remained historically strong.
The data, which was gathered on BILD’s behalf by Altus Group, revealed that new home sales totalled 3,645 in April, decreasing by 29% year over year but still 6% above the 10-year average.
Sales of new single-family homes -- which include detached, linked, semi-detached and townhouses -- plummeted by 47% year over year in April to 571 units sold, however, that was still 54% above the 10-year average.
In the new condominium sector -- which comprises low-, medium- and high-rise buildings, as well as stacked townhomes and lofts -- sales were still elevated despite declining by 24% in April from a year earlier to 3,074. Still, not only was the number of transactions last month 40% above the decade-long average, it is also the fourth highest selling April since Altus began tracking new condo sales 22 years ago.
But according to Dave Wilkes, President and CEO of BILD, there could be headwinds ahead.
“The unpredictability in construction costs, the supply chain disruptions and the strikes our industry is currently experiencing are expected to impact housing supply in the GTA in the coming months,” said Dave Wilkes, BILD President & CEO. “Combined with the factors affecting the larger economy, we are likely to see some volatility in the housing market in the months ahead.”
The benchmark price of new single-family home last month rose by 28.1% year over year to $1,787,1896, while the price of a new condo increased by 12.3% to $1,189,134.
New home inventory increased on a monthly basis in April to 9,327, of which 7,936 were condominiums. Even though the pace of sales decelerated, above-average demand will keep pushing prices skyward, says Dil Banga, a broker with Royal LePage Flower City.
Banga added that the new condo market will remain hot because, in addition to strong investor demand, it’s the only way a growing contingent of GTA residents can even enter the housing market.
“The reason people choose pre-construction is they can build the down payment by putting down a deposit. That’s how they get into the market,” he said. “The buyer pays the initial deposit and every two months they put more into it. Depending on the builder, only 10% down is needed.”