Toronto Condo Builds Surge Amid New Record Prices [Guest Post]
By Sheila O’Hearn, Zoocasa
When housing supply goes down, the price of homes goes up − the present scenario in the GTA and many other major cities in Canada.
The Building Industry and Land Development Association (BILD) reports that the average cost for new single-family, low-rise homes, including detached, semi-detached, row- and townhouses, has increased by 25%, tipping the price tag just over $1 million.
Compared to 10 years ago, when the average price of a new detached home was $444,368, the average home in January 2017 now sells for $1,316,325. Ten years ago, a new GTA townhouse was $328,989, but as of January 2017, the average price is now $879,619. Builds of new ground-oriented homes numbered 18,400 in 2007, but that number has dwindled to 1,524. Meanwhile, the supply of new detached homes dropped to 534, the lowest ever recorded in the GTA, as opposed to 12,242 a decade ago.
“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 BILD President and CEO Bryan Tuckey. “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.”
Provincial policies being implemented for more condo builds
New records have also been set on the condominium front. The report states that, in the GTA, the average price of new condominium apartments in stacked townhouses and mid- and high-rise buildings reached a record-breaking $507,511 in January. The average price per square foot reached a jarring $625. New apartment prices have grown 13% since January of 2016, increasing by almost $60,000. A decade ago the average price was $322,569.
“Our industry is implementing provincial policy by building more condominium apartments and less ground-oriented housing,” Tuckey said. “A decade ago condominiums represented just 42% of available inventory, compared to 88% in 2017.”
After years of healthy supply, the number of new condominium apartments available for purchase began to wane. In January 2017 there were 11,529 new condominiums in builders’ inventories across the GTA − a 10-year low.
Overall, there were 13,053 new homes in builders’ inventories across the region in January, compared to 31,461 a decade ago.
“Today in the GTA, there are less than half the overall number of new homes available to purchase, than there were a decade ago,” Tuckey said. “Lack of serviced developable land, excessive red tape and frequent delays in the development approval process have all been large contributors to our housing supply crisis.”
New condominium apartment sales were the strongest recorded for a January following a record year in 2016. In the GTA, 1,199 homes were sold across the GTA in January, most of which were sold in the City of Toronto, marking an 11 per cent growth over last year.
“Demand for condominium apartments is coming from a variety of sources,” states Patricia Arsenault, Executive Vice President of Research Consulting Services at Altus Group. “Among them: end users who prefer the locations and amenities afforded by condominium apartments; families who might have opted for a single-family home, but have been shut out of that segment due to lack of available product; and investors who are the key providers of new rental supply for the GTA’s growing population.”
Zoocasa is a real estate brokerage based in Toronto.
Sheila O’Hearn is a freelance and creative writer and has worn many hats throughout her career, from general staff reporter to magazine editor. She has a keen interest in business entrepreneurship and currently writes for several outlets. Visit her at LinkedIn for more info.
