New-home sales decline by 48%

New single-family home sales hit 10-year low in January, according to home builders’ association

New construction home sales — houses and condos — declined by 48 per cent in January in the Toronto region, compared to the frenzied real estate market in the same month last year.

It’s a 31 per cent drop from the 10-year average and reflects a supply shortage that has also helped push up prices in the same period, says Toronto’s building industry association.

The single-family benchmark home price rose 19.6 per cent year-over-year last month to $1.23 million — up from about $1 million last January.

Condo prices climbed about 41 per cent year-over-year to a benchmark of $714,430, said the Building and Land Development Association (BILD).

Prices remained flat, however, from December, according to the research compiled by Altus Group.

Of the 1,251 new construction homes sold last month in the Toronto region, only 365 were single-family units. That marks a 10-year low and a 53 per cent decline from last year.

Condo sales were down 47 per cent year-over-year, 5 per cent below the 10-year average.

“The GTA is expected to grow by 9.7 million people by 2041. How are we going to house them?” DAVE WILKES CEO OF BUILDING AND LAND DEVELOPMENT ASSOCIATION

The supply of new homes increased by 350 units in January from December to 11,750 — a three- to fourmonth supply based on the pace of sales in the last year. “A healthy new home market should have nine to12 months’ worth of inventory,” said BILD in a Thursday news release.

“The GTA is expected to grow by 9.7 million people by 2041. How are we going to house them?” said the association’s CEO Dave Wilkes in the release.

Meanwhile, despite the high cost of new-build housing in the region, there are some good values available to consumers, says an analysis of searches on BuzzBuzzHome, an online hub for new home developments. The website had more than one million hits last month, up 58 per cent from January 2017, with firsttime buyers the biggest segment searching online for a home, according to its “Residential Real Estate Round Up Report.”

The analysis looks at the size, location and price of lowrise and highrise housing developments throughout the Toronto region.

The east end of the GTA will give buyers the most bang for their buck, but there are some good values to be had in the west, where condos in Brampton and Mississauga are undervalued compared to other kinds of homes in those communities, said Ben Myers of Bullpen Research and Consulting, the report’s author.

The most popular floor plans that home buyers searched were threebedroom townhouses and fourbedroom detached homes.

Downtown Toronto continues to be the hottest condo market, with units at 357 King attracting the most searches. Those buyers are looking for smaller, less expensive apartments. The most popular units tend to be studios and small one-bedrooms between 375 sq. ft. and 550 sq. ft., priced for less than $500,000.

Myers warned that the continued price growth in the condo market will push rents higher as investment buyers look for returns on their purchases.