GTA new home sales soft in January as buyers remain tentative

GTA new home sales were expectedly soft in January, down slightly from January 2023 and up marginally from December 2023, the Building Industry and Land Development Association (BILD) reports.

There were 578 new home sales in January, which was down three per cent from January 2023 and 68 per cent below the 10-year average, according to Altus Group, BILD’s official source for new home market intelligence.

Pick-up in spring

“Given interest rates and the expectation of moves by the Bank of Canada later this year, January new home sales were as expected with prospective new-home buyers remaining on the sidelines,” says Justin Sherwood, senior vice-president communications and stakeholder relations at BILD. “With (the recent) report, if you extract housing related costs we are basically at the two-per-cent rate for inflation. We anticipate that market activity will pick up in the spring with potential rate changes on the horizon. The present inventory levels provide a great degree of selection and choice for new home buyers.”

“Pent up demand continued to accumulate with buyers taking a wait-and-see attitude,” adds Edward Jegg, research manager with Altus Group. “Affordability gains from future interest rate declines will be threatened by price jumps the longer the pool of buyers builds on the sidelines.”

Condominium units, including in low, medium and highrise buildings, stacked townhouses and loft units, accounted for 233 units sold in January, down 44 per cent from January 2023 and 60 per cent below the 10-year average.

Inventory levels

There were 345 single-family home sales in January, up 92 per cent from January 2023 and 78 per cent below the 10-year average. Single-family homes include detached, linked and semi-detached houses and townhouses (excluding stacked townhouses).

Total new home remaining inventory decreased compared to the previous month, to 19,829 units. It included 16,677 condominium units and 3,152 single-family dwellings. This represents a combined inventory level of 10.5 months, based on average sales for the last 12 months. This remains one of the highest inventory levels for new homes seen in the last decade.

Benchmark prices decreased in January for single-family homes and increased for condominium apartments compared to the previous month. The benchmark price for new condominium apartments was $1.05 million, down seven per cent over the last 12 months. The benchmark price for new single-family homes was $1.57 million, down nine per cent.