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New home sales rise in Greater Toronto Area after 2018 drop, says Altus Group
Published Thursday, January 30, 2020 3:38PM EST
The increase was led by gains in Greater Vancouver and Vancouver Island, the Greater Toronto Area, London and St. Thomas, Ont., and Barrie, Ont. (File image)
TORONTO -- New home sales in the Greater Toronto Area climbed 47 per cent last year after drops in both single-family and condo sales a year earlier, said a report by Altus Group out Thursday.
The real estate services firm said new single-family home sales of 9,523 were 2.5 times higher than 2018, when sales in the segment hit a 22-year low following tighter mortgage rules.
Sales of new condos reached 26,948 for the third-highest level ever, driven by sales outside the City of Toronto and in particular in the York Region where sales doubled from a year earlier.
Rising sales in both segments was driven by a wider range of price points and stronger buyer demand to push sales near the 10-year average, the report said.
The price difference between the two segments narrowed last year as the average asking price of $1.09 million for new single-family homes was down 17 per cent from the 2017 peak, while the average price for a new condo reached an all-time high of $917,000.
The price gap between the two segments was much narrower in the early 2000s but started to diverge significantly around 2012 when single-family prices started to rise rapidly and condo price gains remained fairly flat until about 2017.
Looking ahead, rising home prices and growing uncertainty on the economy and job outlook helped to put downward pressure on share of people planning to buy.
A national online survey of 3,000 people at the end of last year by Altus found that only 12 per cent of GTA households said they were planning to buy this year, down from 21 per cent when the poll was conducted a year earlier.
The survey found that close to 40 per cent of renters intended to buy eventually, but were still saving for a downpayment. About 20 per cent would like to buy, but didn't think they'd ever afford a mortgage.
According to the polling industry's generally accepted standards, online surveys cannot be assigned a margin of error because they do not randomly sample the population.
The potentially lower buying intentions aren't likely to put pressure on prices, however, as inventory levels remain under pressure. As of December there were just over 12,000 condo units of inventory, representing 5.5 months of supply to be about half the long-term average for the month.
Residential land sales, which could pave the way for future construction, was down again last year to about where things stood in 2015, though Altus noted a lack of supply was at least partially responsible for the declines.
This report by The Canadian Press was first published Jan. 30, 2020.