New-build single-family home prices soar 25 per cent year over year in May
|Toronto Star 05 Jul 2021 at 06:38|
The price of a new construction home in the Toronto area rose nearly 25 per cent between May 2020 and May 2021 to a benchmark $1.38 million as housing demand continues to soar and lowrise home supplies dwindles, according to the building industry.
Although the price of a lowrise home fell slightly month over month, inventory levels are alarmingly low, said David Wilkes, CEO of the Building and Land Development Association (BILD).
He also cited historically low borrowing rates and said, “There’s a psychology that is part of the market that people don’t want to be left out.
“We’re running out of inventory,” said Wilkes, citing only one month of supply remaining on single-family homes available to buy in the pre-construction, under construction or just built stages.
When condo supply is added, there are 12,555 homes or about 3.3 months of inventory in the GTA. But BILD says a balanced market requires nine to 12 months of inventory.
There were 1,265 single-family homes sold in May, including detached, semi-detached and townhouses. Stacked towns are categorized as condos in BILD’s data tracked by Altus Group.
Although condo sales slowed from the heated activity of March and April, the 2,396 units that sold were 10 per cent above the 10-year average for the month of May.
“Buyers continue to be attracted to new openings, with about half of the newly released units available for purchase before the last 10 days of May selling within the month,” said Ryan Wyse, Altus manager of analytics and data solutions.
The benchmark price for condos, $1.06 million, was 8 per cent higher than last May, and about the same as April.
BILD figures show May condo sales were down compared to 2019 in all parts of the Toronto region except Durham and the city of Toronto. The association warned against comparing sales year over year due to the impacts of the pandemic last spring.
The resurging highrise market demonstrates that people think the city will come back from the pandemic, Wilkes said.
As single-family homes have increased in price, condos also look marginally more attractive from an affordability standpoint, he said.
This year to date, single-family home sales are 20 per cent above the 10-year average and condos are 35 per cent over the decade average.
The average price per square foot for condos in May was $1,112 per square foot — about $100 above last year’s benchmark.