Sales of new homes and condominiums in the GTA remained low as prices continued to climb at a record pace in the ground-related sector, says BILD (Building Industry and Land Development Association). According to RealNet Canada Inc., BILD’s official source for new home market intelligence, new home sales in July totalled the lowest in 10 years while year-to-date sales added to the second-lowest in a decade.
While high-rise sales fell 34 per cent below the 10-year average in July, condominium construction across the GTA is at a record high. As of July 31, there are 256 high-rise developments — representing 66,126 new homes — currently under construction. More than 17,000 are expected to be completed by year’s end.
Part of the sales decline is reduced new inventory as a result of self-discipline by the industry. GTA developers introduced just two new projects into the market in July.
“It’s important to understand that while we are experiencing record-high construction, these homes have been sold two to three years ago and are not an accurate representation of today’s new homes market,” explained BILD president and CEO Bryan Tuckey. “Sales activity in 2013 has been low and we will start to see the effect of that in two to three years.”
Tuckey also stressed the importance of differentiating between the new homes market, which consists of new developments sold in pre-construction, and the resale market, which represents existing properties sold by homeowners.
Sales of ground-related housing continued to slide as a result of limited supply and reduced affordability. At 783 sales in July, the low-rise market has fallen 45 per cent below the 10-year average.
Meanwhile, the RealNet New Home Price Index reached a new record in the low-rise sector, bringing the average price of a low-rise home in the GTA to $645,854. The high-rise price index decreased slightly to $430,930 with the price gap hitting a record high of $214,924.