Toronto-area builders say they are simply running out of low-rise homes to sell.
While much of the focus in the country’s largest housing market has been on existing home sales, which saw a 16.2 per cent year-over-year increase in prices in April, new home values continue to show no sign of slowing down. This is especially true in the low-rise sector where supply is at an all-time low, the Building and Land Industry Association said Tuesday.
The number of new detached, semi-detached and townhomes available for purchase in builders’ inventory in the Greater Toronto Area was 2,751 on April 30, compared to 5,171 a year ago.
The average price of new low-rise homes in the GTA was $864,181, an increase of 11 per cent from a year ago. In the detached home category, which climbed past an average sale price of $1 million in the first quarter of 2016, the average price has risen to $1,059,263 — increasing $13,064 in just 30 days.
“Demand for low-rise homes continues to exceed supply,” said Bryan Tuckey, president of BILD, in a release. “If monthly low-rise sales are an indication of consumer demand, the GTA has less than two months of supply in remaining inventory, and inventory is declining every month.”
Tuckey said the ongoing constraints of serviced, developable land has limited the supply of new low-rise homes brought to market creating “dramatic” increases in low-rise prices across the Toronto area.
In the GTA, more than 75 per cent of the new homes available for purchase are high-rise homes. On April 30, 87 per cent of all new homes available for purchase in builders’ inventory across the GTA were condos. But even the 17,698 condos available was a 10 per cent decrease from a year earlier.
The lack of supply is impacting new low-rise homes sales in April which dropped 14 per cent from a year ago to 2,324. About half of the new low-rise homes sold were detached.
Sales of high-rise homes also dropped in April with 1,640 units sold, nine per cent below numbers from a year ago, 10 per cent below the long-term average. The average price of a high-rise home still rose three per cent from a year ago to $461,281. On a price-per-square-foot basis, prices were up five per cent from a year ago to $583.
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