New lowrise home sales return in some areas as June remains slow

Greater Toronto Area new home sales remained slow in June, hampered by high costs to build and other factors, but are showing early signs of recovery, according to the Building Industry and Land Development Association (BILD).
“GTA new homes sales remained weak in June,” says Edward Jegg, research manager at Altus Group, BILD’s official source for new home market intelligence. “Where we are seeing activity, new-home buyers are finding homes that meet their needs and that they can afford.”

High inventory

Condominium units, including in low-, medium and highrise buildings, stacked townhouses and loft units, accounted for 732 units sold in June, down 61 per cent from June 2023 and 68 per cent below the 10-year average.

There were 607 single-family home sales in June, up five per cent from June 2023 and 38 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 increased compared to the previous month, to 21,158 units. This includes 17,391 condominium units and 3,767 single-family dwellings. This represents a combined inventory level of 14.5 months, based on average sales for the last 12 months. This remains a high inventory level, maintaining the trend seen since autumn 2023 of remaining inventory levels hovering near the 20,000 mark.

Structural issues

“Significant ongoing structural issues, notably the cost to build and lengthy approval timeframes, are hampering the ability for new projects to come to market – and limiting affordability,” says Justin Sherwood, senior vice-president of communications and stakeholder relations at BILD. “We are continuing to see some sales return in select regions of the GTA, predominantly single-family homes and outside of the city of Toronto. However, the high costs of material, labour and land, combined with municipal fees (such as development charges) and slow municipal approvals, are adding unnecessary costs and delays to new projects. This in turn is causing price stickiness and acting like a brake to new projects. While interest rates will moderate over time, inaction on these structural barriers will have long term consequences to deliver new homes in the in the region.”

Benchmark prices decreased in June for both single-family homes and for condominium apartments compared to the previous year. The benchmark price for new condominiums was $1.02 million, down six per cent over the last 12 months. The benchmark price for new single-family homes was $1.61 million, also down six per cent.