High-rise living increasingly part of GTA’s high-priced housing

The average price of a new ground-level, Toronto area home surpassed $900,000 in July.

Thestar.com
Aug. 22, 2016
By Tess Kalinowski

High-rise living and sky-high home prices aren't just for downtowners any more.

Toronto is still the hotbed of condo activity, with more than half of sales occurring in the city. But apartments are a hot commodity all over, with sales across the region rising 52 per cent in July compared to the same month last year.

Low-rise home sales declined 32 per cent last month, part of a 7 per cent drop this year to date. But high rises have risen 25 per cent year over year in 2016.

The average price of a new low-rise Toronto-area home - including detached houses, semis and townhomes - continued edging closer to the $1 million mark last month, hitting $906,508 - up 12 per cent over July 2015.

At the same time, the supply of ground-level new homes has plummeted, according to an Altus Group report for the Building Industry and Land Development Association (BILD) released Monday.

While supply is an issue in the climbing condo sales, other factors also make them an attractive alternative, said BILD CEO Brian Tuckey. He pointed to the new subway to Vaughan Metropolitan Centre, as an example, of transit-oriented development offering affordable home prices in a location that makes getting to work easy.

Condos in the Toronto area averaged $475,764, about half the price of other housing types.

"There is a stronger demand for larger units. I suspect that is young people again choosing to raise their family in condominiums or possibly empty nesters who are moving into the condominium market and selling their ground-related home," said Tuckey.

Units averaged 801 sq. ft. in July, suggesting a departure from smaller, less expensive apartments that builders have been using to entice first-time buyers.

But young buyers with children are still more likely to be interested in ground-level homes, he said.

"The townhome is becoming almost the new single, which is a positive trend from a sustainability and livability standpoint," said Tuckey.

Townhome prices average $758,434 in July, only slightly less than the average cost of a semi at $771,530. The affordability and short supply of semi-detached homes has helped increase the average price by $200,000 in a single year.

The 17,213 new homes available in the region at the end of July, was a 41 per cent decrease from 10 years ago. Of those, only 1,568 were low-rise homes. That's less than a month's supply based on a 10-year sales trend average, said BILD.

Of the 2,226 homes sold last month, only 905 were low-rise units.

"We do have high population growth but you cannot deny the fact that supply is a big part of the equation," said Tuckey.

"Serviced land is at a premium close to the city, applications are becoming more and more difficult to get through the system because of community resistance and, you need to have a good solid housing choice for the residents that are coming to this region to live."