Sweet ’16 for GTA new homes?
Buyers should do homework, be prepared to move quickly as launches selling out fast
The GTA’s new-home market started off 2016 slowly and with some uncertainty. But momentum picked up in February and the year is now shaping up to be a potentially “sweet” ’16, as developers go to great lengths to bring the right projects on stream, in the right locations and at the right prices.
Supply is the lifeblood of the newhousing market. New-home shoppers can’t purchase what’s not available in builder sales centres, and the new homes on the market now turn into the resale stock of tomorrow. But the supply that is available at builder sales centres arrives there via a risky, complicated, lengthy and ever-changing development process.
There were 5,544 new homes sold in the GTA in the first two months of the year, according to the Altus Group, and those sales were split almost equally between lowrise and highrise homes (2,738 lowrise/2,806 highrise). But sales have outpaced supply, with only 4,795 units introduced into the market during that time period.
As a result, available builder inventories and consumer choices have been trending downward. As of the end of February, there were a record-low 4,017 new lowrise homes available across the entire GTA, and their index price was a record-high $831,212. Highrise inventories were down to 19,105 units — the majority of those in pre-construction status — with an index price of $453,999.
Most of the new highrise launches in the early part of the year have taken place in the 905, in places such as Mississauga, Markham and Vaughan, with more expected there as the TTC subway-expansion project gets closer to its projected 2017 completion. And a robust lineup of planned highrise launches lies ahead in 2016 across a number of submarkets, including Downtown East, Downtown West and Yorkville.
Meanwhile, most of the momentum in the GTA lowrise market has been taking place in the north and west, and increasingly those markets are beginning to compete with their Greater Golden Horseshoe neighbours, where prices can be up to $300,000 cheaper for an extra 30-minute drive.
Those GTA residents in the market for a new lowrise home this year should be aware of their financial capabilities and be prepared to drive farther, and move quickly, as new project launches are selling out at lightning speed.
For those in the market for a newly built highrise home this year, 2016 completions should be in the 20,000-unit range — comparable to 2015 — but just 13 per cent of the suites under construction are cur- rently available for sale.
Luck will favour the informed and the connected this year. Doing your homework is always key when wading into the new-home market. It might also be wise to seek the assistance of an experienced TREB Realtor. After all, the 2016 market is poised to create up to $20 billion in new-home-buying opportunities. Those who want their piece of the housing action will need to act decisively — and smartly. George Carras is the founder of RealNet Canada Inc. and the president of RealStrategies Inc. His column appears in New in Homes & Condos once a month. For more information, visit realnet.ca or Twitter at @realnet_canada.