What a difference a decade makes in new home real estate

New home real estate is a cyclical industry, and the past decade is a perfect example. Data analytics firm Altus Group provide monthly real estate statistics for the GTA to help us understand our ever-changing market. A look at the past 10-plus years is an interesting reflection of the evolving set of trends we’re experiencing.

The year 2011 was called the “year of the condo” for setting a new highrise sales record. Index lowrise prices came in at $545,372, while highrise was $434,322. The $111,000 difference sent purchasers turning to condos in droves. During 2012, total new home sales declined, yet sales of highrise condos were the fourth highest since 2000. The index price for lowrise hit $632,868, bringing the previous price gap up to $196,844.

New records

The year 2013 saw dips in the sales of both high- and lowrise. By December, the price index for lowrise hit a high of $654,147; highrise remained the same. Then during 2014, the average price of a lowrise home exceeded the $700,000 mark; the highrise average price went up to $449,371. And yet, overall sales in 2014 were 41 per cent higher than 2013.

Flash forward to 2015, when overall sales reached the third highest in the previous decade. Lowrise sales were up eight per cent from 2014; highrise sales were down two per cent. The average price of new condos was $453,083, down from 2014 – largely due to developers making suite sizes smaller. The average price of new lowrise homes reached $829,766 – an all-time high.

In 2016, new records were set for overall sales, low inventory, high prices and highrise condo sales. More condos were sold than in any previous year on record, and that year saw the highest number of new homes ever sold in the GTA. Then on to 2017, when condo sales hit a new record for most sold and lowrise for the least number sold in any year. Overall, that year was the fourth strongest in the GTA since Altus Group began tracking in 2000.

Robust sales

A new cycle kicked in, as 2018 saw the lowest total sales in nearly 20 years. Stricter mortgage stress testing, rising interest rates and lack of supply combined with the record condo sales of the previous year all played a roll in lower numbers. Sales picked up in 2019, with highrise up 157 per cent from the previous year and lowrise up 27 per cent. In December, the benchmark price for new condos was $916,585 and for lowrise $1.08 million.

In 2020, the pandemic changed everything, so industry professionals adapted by using technology to sell online. Even with the uncertainty across the globe, we had a very busy year; the GTA new home market outperformed total sales of the previous year. In 2021, overall new home sales were the second highest on record after 2002. Sales of highrise condos were especially strong, nearly reaching 2017’s record. Benchmark pricing hit new records: $1.82 million for lowrise, and $1.16 million for highrise.

Halfway through 2022, we’re still experiencing supply levels that are sadly lacking. Sales started off with a bang; then mortgage interest rates rose, and people panicked. Although June sales fell compared to June 2021. Now that interest rates have levelled off, fall sales promise to be robust once again. Whatever cycle new construction sales are in, it’s always wise to buy new.