Toronto builders see little effect in new rules
New townhouse price passes $1M mark
TORONTO • Builders in Canada’s largest city maintain they have been unaffected by Ontario measures to cool the market and say the average selling price of a new townhouse in the Greater Toronto Area crossed $1 million for the first time at the end of May.
The Building Industry and Land Development Association said Friday the average available low- rise detached home cost $ 1,222,699 at the end of last month, a 40 per cent increase from a year ago, but only up $ 10,000 from April numbers.
“For the new homes market, the province’s fair housing plan has had little real effect,” Bryan Tuckey, chief executive of BILD, said. “Prices continue to increase and supply, especially for single- family lowrise homes, continues to be low. The price acceleration in the condo portion of the market is especially worrisome since it not only represents the lion’s share of new housing in the GTA, it’s also making it difficult for condos to remain the affordable option.”
On April 20, the Ontario government introduced 16 measures to cool the housing market, including a 15 per cent non-resident speculation tax on homes in the Greater Golden Horseshoe and expanded rent control rules for the whole province.
While prices are still soaring in the new homes market compared to a year ago, BILD’s own release shows the gains are shrinking. The $10,000 increase in low-rise prices amounted to a less than a one per cent increase from a month ago. Nevertheless, gains in the new home market compare to declines that are happening in existing homes markets where average prices have dropped 12.1 per cent when comparing the first two weeks of June to the average price at the end of April, the Toronto Real Estate Board reported.
Doug Porter, chief economist with the Bank of Montreal, said price changes based on market conditions tend to happen a little more slowly in the new homes market because you have a different set of sellers, namely builders.
“In general, new home prices can be a little more sticky and stable,” he said. “The seller is a stronger entity and less affected by shortterm moves in the market.”