Photo: Martin Cathrae/Flickr
Those shopping in January for new detached homes around the Greater Toronto Area — a region with a population of about 6.4 million — didn’t have much to choose from.
There were only 534 such dwellings in GTA builders’ unsold inventories last month, a record low that has nosedived from 12,242 in January 2007, according to the latest monthly data from Altus Group.
Free-falling supply levels are causing scorching price gains for new housing in the GTA, says the Building Industry and Land Development (BILD), which publishes Altus Group data, in a statement.
“The GTA is facing a severe shortage of housing supply, particularly for single-family homes which sell as soon as they come to market,” said Bryan Tuckey, BILD’s president and CEO, in a statement.
The dearth of never-before-lived-in detached homes contributed to their all-time high average list price of $1,316,325 in January, BILD suggests. The industry group is quick to note a decade ago the average was $444,368.
“When there aren’t enough homes to satisfy demand, prices increase, and that is exactly what has been happening in our region over the last decade,” Tuckey continued.
BILD lays out what a “severe shortage” of housing in the GTA looks like with more numbers.
A total of 1,524 ground-related homes were on the market in 2017’s first month, a far cry from the 18,400 prospective buyers could browse in January 2007.
Over that same period, all new homes available for sale in the GTA fell to 13,053 units, down from 31,461.
“Today in the GTA, there are less than half the overall number of homes available to purchase than there were a decade ago,” Tuckey added.
Tuckey includes what he says is a lack of land ready for development, “excessive red tape” and an oft-delayed municipal approval processes as challenges facing builders trying to bring more homes to market.
Dwindling levels of available single-family homes led to fewer sales. Throughout the month of January, just 741 new single-family homes sold, a total of 369 of which were detached. Single-family home sales slumped to a 10-year low for January.
The 11,529 new condo units available for sale in January represented a decade low as well, according to BILD. “After years of healthy supply, the number of new condominium apartments available for purchase began to decline,” the industry group noted.
On average, new condo apartments (whether they be in a stacked townhouse development or
mid- or high-rise condo buildings) were going for a record $507,511 last month, with per-square-foot pricing averaging $625. As of January 2007, GTA condos had an average price of $322,569.
The 1,199 new condos that buyers snapped up last month represented the most new condo sales on record in any January.
Patricia Arsenault, Altus Group’s executive vice president of research consulting services, says that “demand for condominium apartments is coming from a variety of sources.”
Amenities and central locations attract some end users, while families who can’t afford the single-family home they’d prefer are turning to condos as well. Investors looking for units they can rent out are also driving demand.