Industry calls for urgent government action as new home sales hit all-time low

Greater Toronto Area (GTA) new home sales in July remained slow, recording an all-time low for the month with very few new project releases and steadily increasing months of inventory, the Building Industry and Land Development Association (BILD) reports.

There were 654 new home sales in July which was down 48 per cent from July 2023 and 70 per cent below the 10-year average, according to Altus Group, BILD’s official source for new home market intelligence.

Immediate action

“The numbers present a clear picture and signal the need for an urgent response from government,” says Justin Sherwood, senior vice-president of communications and stakeholder relations at BILD. “Changes in interest rates will not solve what is an ongoing structural problem, particularly evident in the GTA. The cost to build, driven by excessive government fees and taxes, is simply too high. Without immediate action by government, new construction activity will continue to slow and the GTA’s housing shortage will reach unprecedented levels over the next few years.”

“GTA new homes sales in July 2024 sank to another record monthly low as buyers remained unwilling to leave the sidelines,” says Edward Jegg, research manager with Altus Group. “Further expected decreases in interest rates in the coming months, along with elevated inventories, means there will be plenty of opportunities once consumer confidence improves.”

Condominium apartments, including units in low-, medium- and highrise buildings, stacked townhouses and loft units, accounted for 287 units sold in July, down 67 per cent from July 2023 and 81 per cent below the 10-year average.

There were 367 single-family home sales in July, down one per cent from July 2023 but 42 per cent below the 10-year average. Single-family homes include detached, linked and semi-detached houses and townhouses (excluding stacked townhouses).

Supply/demand imbalance

Total new home remaining inventory increased compared to the previous month, to 21,660 units. This includes 17,445 condominium apartment units and 4,215 single-family dwellings. This represents a combined inventory level of 15 months, based on average sales for the last 12 months. This is a high inventory level, maintaining the trend seen since autumn 2023 of remaining inventory levels near or just above the 20,000-unit mark. Months of inventory are increasing not because the number of new units coming to market is dramatically increasing, but rather because sales are continually decreasing. This is an unhealthy situation, because as interest rates decrease, sales will return but it will take longer for new building to recover, setting up a future supply/demand imbalance.

Benchmark prices decreased in July for both single-family homes and condominium units compared to the previous year. The benchmark price for new condominiums was $1.02 million, which was down six per cent over the last 12 months, while new single-family homes were $1.58 million, down five per cent.