New home prices in the GTA continue to set records, while sales of new highrise homes are on pace for an unprecedented year, according to the Building Industry and Land Development Association’s (BILD) sales summary for September.
So far this year, there have been a record 20,596 highrise homes sold across the GTA, according to Altus Group, BILD’s official source for new home market intelligence. Highrise units have accounted for nearly 60 per cent of the GTA’s 34,736 new home sales as of the end of September. For the same period there were 14,140 new lowrise sold.
Average prices for both new highrise and lowrise homes continued to climb and set new records across the GTA. The average price of new lowrise homes, including detached, semi-detached homes and townhomes, increased by more than $60,000 in just one month, to reach an unprecedented $992,231 in September. Prices have grown 22 per cent since last year.
New detached home prices climbed to $1.19 million in September, while new highrise prices in the GTA also broke records – hitting an unprecedented $486,605 last month, up 10 per cent from last year.
BILD President and CEO Bryan Tuckey attributes the GTA’s shortage of housing supply as the primary driver of price increases. “We have a serious housing supply challenge in the GTA due to a significant shortage of shovel-ready land and long and uncertain project approval timelines,” he says. “These factors are severely restricting the number of new homes being brought to market and are causing prices to surge month after month.”
Supply of new homes available to purchase in builders’ inventory declined by more than 10,000 homes in the last 12 months. There were 15,421 new homes and condominiums available for purchase in September across the GTA, compared to 25,848 at this time last year.
Lowrise supply showed a modest increase over August, but the 1,604 homes were still a 64 per cent decline from last year. The slight increase is attributed to a strong number of new project launches, which is typical for September.
There were just 764 detached homes available for sale across the region. That is less than one month of supply, based on recent sales trends.
“New lowrise home sales year-to-date in the GTA are very similar to the situation back in 2009, before house prices started to take off, averaging about 1,500 per month,” says Patricia Arsenault, executive vice-president of research consulting services at Altus Data Solutions.
“What has changed dramatically is the decline in options available to buyers. Back in 2009, there were nine lowrise homes available to purchase for every home sold. Now, that ratio is less than two to one. Given the sharp drop in competitive product alongside buoyant buyer interest, it’s no surprise that new lowrise home prices have doubled since 2009.”
Highrise inventory in September was 13,817 homes, down slightly from August and 35 per cent less than at this time last year.
“The recent increase in highrise prices can be attributed to the rise in average suite size, combined with a growing price per square foot,” Tuckey says. “This year, we have seen the introduction of larger suites aimed at purchasers who have been priced out of the lowrise market.”
The average size of a highrise home in the GTA was 809 sq. ft. in September, compared to 767 sq. ft. last year. Meanwhile the price per sq. ft. increased to $601, up $26 from last year.
September is a prime project launch month for both new low- and highrise development. There were 2,468 highrise units sold in September, 1,839 of them in the city of Toronto.
Lowrise sales in September were up four per cent from a year ago to 1,200, with more than half of the sales coming from York Region. So far this year, 14,140 new lowrise homes have been purchased across the GTA, eight per cent below the same period in 2015.