New-home prices hit record with no sign of slowing down
GTA average soars 16% year-over-year to $783,995 as demand continues to outstrip dwindling supply
East Gwillimbury is hot. So are Brampton, Caledon, Vaughan, Markham and Richmond Hill.
The drive to buy a home with a backyard — and especially the Holy Grail of housing, a detached house — is requiring a longer-distance commute as the average price of new detached, townhomes, semis and link houses across the GTA hit another record, $783,995, as of May.
That’s up 16 per cent in just a year, largely because demand for new houses continues to far outstrip dwindling supply, according to figures released Thursday by the Building Industry and Land Development Association (BILD).
The average price of new highrise condos, on the other hand, remained the same — an average of $440,463 across the GTA — as sales dipped12 per cent in May over a year ago. That’s still slightly above the 10-year average for new condo sales of 7,213 for the first five months of the year.
The wildly escalating price of new houses means the gap between the average cost of a lowrise house and a highrise condo is now $343,492, according to the figures compiled for BILD by RealNet Canada Inc. That’s a record high, up more than $100,000 just in a year.
“It’s alarming just how quickly that price gap has grown,” says BILD president and CEO Bryan Tuckey. “That seriously impacts the family with a couple of kids that wants to move from a condo to a house.
“Not only do they have to manage that gap from a financial standpoint,” by taking on a much bigger mortgage just to get a backyard, “but they are going to have a long drive.”
Increasingly, families are just going to find themselves priced out of the house market, including the resale market which is also seeing prices climb by double digits driven largely by fierce competition for existing detached and semi-detached homes across the GTA, Tuckey noted.
“Detached homes are still the No. 1 choice and, in a lot of cases, people seem willing to drive further to get the backyard and the 2,500 square feet,” says Phong Ngo, new homes manager for market research company RealNet.
Demand shows no signs of letting up: In May, sales of new lowrise houses were up 28 per cent year-over-year, to 2,442 homes, says Ngo. That brought total sales for the first five months of 9,499, well above the 10-year average for the same time period of 7,871.
But the number of houses for sale in the pre-construction or newly built stage — RealNet calls it “remaining inventory” — was just 5,198 homes in May. That’s less than half the 10-year average of 10,548 houses that have traditionally been avail- able for sale, says Ngo.
That decline in inventory has been driven by a number of factors, top among them the lack of enough build-ready land serviced with roads and sewers.
If East Gwillimbury is hot, it’s largely because the York-Durham sewer extension, first approved decades ago, is finally being pushed north through the area so land is finally being freed up for building, says Tuckey.
The 404 extension opened nearby last year and a relatively new GO train station has eased the commute to downtown jobs to under an hour each way.
Sales are underway for tracts of housing in nearby Queensville and if there was any doubt that houses remain in high demand, just consider Minto’s Queens Landing project which launched earlier this year in East Gwillimbury.
When the first 90 homes went up for sale last February in the semi-rural area, social media was buzzing. Some 7,500 people registered their interest in townhomes and detached houses on 36- and 43-foot lots, starting in the low $300,000.
By the Saturday morning sales were to start, the parking lot and roadway were jammed with interested buyers, some of whom slept in their cars to be first in line just to get a house.