New construction home sales hit 20-year low
Historic decline expected as sales offices forced to close, industry group says
April marked a 20-year low for sales of new construction homes in the Toronto area, down 80 per cent year over year, although prices held steady as builders closed their sales offices to comply with COVID-19 restrictions.
The new home construction industry showed the benchmark price of a single-family home remained flat — down 0.2 per cent last month at $1.12 million, compared with April 2019. That includes detached, semidetached and town houses.
Condos sold for 30 per cent more year over year in April, putting the benchmark at $984,369, according to the Building Industry and Land Development Association (BILD).
But the number of condo sales declined 85 per cent to only 470 units of the 771 total new construction home sales. The 301 single-family home sales was also 62 per cent below last April.
It was the lowest number of April sales since Altus Group began tracking home construction in 2000, BILD said.
“I am not surprised by the historic decline of sales. It was anticipated because, although construction activity was maintained, certainly sales activity was affected with sales centres not being operational,” BILD CEO David Wilkes said.
“It wasn’t price that was a concern for (buyers).
“It was the ability to get out and purchase,” he said.
Homebuilders continued to work on construction of homes near completion as permitted by the province, Wilkes said.
On the sales side, builders and realtors were spurred to innovate with virtual home tours and online meetings, he said.
Wilkes said governments are expecting home construction will be a driver of the economic recovery.
“The underlying foundation of our market is strong. It will take us some time to get back there, particularly as we look at when we will return to traditional immigration levels. I do believe the sector will rebound,” he said.
BILD says there are 270,129 jobs related to home construction and renovation, accounting for $16.5 billion in wages.
“They’re not footloose jobs. They have to be undertaken in the communities where the homes and condos are being built,” Wilkes said.