In the GTA new homes market, 2016 was a record setting year for low inventory, high prices and higrise condo sales, according to the Building Industry and Land Development Association (BILD).
There were 29,186 new highrise units sold across the GTA in 2016, more than in any previous year on record and 30 per cent more than in 2015, according to Altus Group, BILD’s official source for new-home market intelligence. Sales were up in every region in the GTA, particular in Durham where sales were more than double those of 2015.
Overall in 2016, there were 47,161 new homes sold in the GTA, 62 per cent were highrise units and 38 per cent, 17,975 units, were lowrise homes.
The year that saw the most new homes ever sold in the GTA was 2002, when 53,660 units were sold, of which 72 per cent were lowrise and 28 per cent highrise.
“The decline in lowrise sales in 2016 was due to the lack of product available to purchase, not softer demand,” says Patricia Arsenault, executive vice-president of Research Consulting Services at Altus Group. “The fact that new product is being quickly absorbed, despite rising prices, shows there is continued buyer interest in purchasing new ground-oriented homes in the GTA.”
The number of new homes available to buyers in builders’ inventory across the GTA reached an unprecedented new low at the end of December 2016, while prices for all types of new homes in the GTA broke records. At the end of that month, there were 13,670 new homes available for purchase, less than half of the 30,400 homes that were available in builders’ inventories a decade ago. New highrise supply reached a 10-year low, falling to 11,792 units last month. Meanwhile, lowrise supply was 1,878 homes, of which only 742 were single-family detached homes.
Ten years ago, there were 12,871 highrise units available to purchase and 17,529 lowrise units, of which 11,602 were single-family detached homes.
“We have a shortage of housing supply in the GTA that is approaching crisis levels,” says BILD President and CEO Bryan Tuckey. “Housing is selling as quickly as the industry can bring it to market and the lack of developable land that is serviced with infrastructure, excessive red tape, out-of-date zoning and NIMBYism are hindering our ability to bring more to the market.”
The lack of supply is forcing prices up across the board. The average price of available new lowrise homes, which includes detached and semi-detached houses and townhomes, was $995,116 in December 2016, and for new single-family detached homes in the GTA the average was $1.26 million. The average price of new detached homes increased by more than $273,000 in the past 12 months.
Prices for new highrise homes also reached an all-time high in 2016. In December the average price of condo units in the GTA was $507,128. In December 2006, it was $321,353. The average size of a condo suite in the GTA grew to 826 sq. ft. last month, while the average price per square foot increased to $614. A year ago, the average price per square foot was $584 while the size of an average suite was 775 sq. ft.
Canada Mortgage and Housing Corp. this week confirmed how much home prices in the GTA are having a spillover affect in surrounding areas.