Lack of new housing supply continues to escalate prices, as average new home prices for both single-family detached homes and highrise condos in the GTA reached unprecedented levels in November, according to the Building Industry and Land Development Association (BILD).
The number of new homes available for purchase in the GTA continues to be around all-time lows. At the end of November, there were 15,184 new homes in builders’ inventories, only 84 more than in August which reported the lowest level on record. Housing supply has plummeted over the past decade. In November 2006, there were 31,150 new homes available for sale according to Altus Group, BILD’s official source for new home market intelligence.
Only 13 per cent of the available inventory at the end of last month was low-rise homes with just 2,036 units and of those 789 were detached single-family houses. Available highrise supply was also down in November, falling to 13,148 units.
HIGHRISE SUPPLY ON DOWNWARD PATH
“The low inventory story is not only about lowrise – highrise inventories have been on a downward path over the past three years,” says Patricia Arsenault, executive vice-president of Research Consulting Services at Altus Data Solutions. “Total available inventory in November was the lowest November level we have seen since we first started to track this data in 2000.”
Low levels of inventory resulted in record-setting prices for detached homes and highrise condominiums in November. The average price of new condos in the GTA reached $493,137, a 10-per-cent increase from a year ago. Condo unit size continued to increase with the average in November, at 820 square feet.
Meanwhile, the average price of new detached homes in the GTA hit $1.23 million in November, up 27 per cent from last year. Since the beginning of the year, new detached single-family homes in the GTA have gone up by more than $258,000.
Overall, average new home prices for lowrise, which includes detached and semi-detached houses as well as townhomes, increased 20 per cent over the past 12 months. In November, a buyer needed $977,890 to buy the average lowrise home.
BUILDING TO POLICY
“The industry is building to government policy and building far fewer lowrise homes, especially detached single-family homes, but demand has not dropped with the supply so prices continue to increase,” says Michelle Noble, vice-president of Communications, Marketing and Media Relations at BILD.
So far this year there were 8,843 detached homes sold in the GTA, which is 16 per cent fewer than in 2015. At this time 10 years ago, 12,273 detached homes were sold across the region.
Overall there have been 43,651 new homes sold in 2016 with highrise accounting for 60 per cent or 26,299 homes and lowrise totaling 17,352 homes.