New home sales soar in June, as condos dominate market
Condos accounted for 91 per cent of the new homes sold in the Toronto area last month.

TheStar.com
July 25, 2017
Tess Kalinowski

New construction home sales, especially condos, are rising even as the re-sale property market continues to slump in the Toronto region.

The gains in the newly-built home market are almost entirely due to apartments and stacked townhouses, which accounted for 91 per cent of the 6,046 homes sold in June, according to the latest numbers from the Building Industry and Land Development Association (BILD) on Tuesday.

New condo sales were up 89 per cent year over year, compared to a 72 per cent year-over-year drop in the sale of single family homes.

The strong condo performance was due in part to the large number of new projects that hit the market in May and June, said Patricia Arsenault, of Altus Group, which tracks new home statistics.

But their more affordable entry-point prices appealed to many consumers, who might have otherwise preferred a ground-level home and to investors who have noted the escalating price of condos, she said.

"With condo prices continuing to escalate, this segment of the market is becoming out of reach for many consumers," warned BILD CEO Bryan Tuckey in a press release.

The price of new apartments rose $22,000 to $627,000 in June, compared to May — a 34 per cent year-over-year increase.

The price per square foot, considered one of the most accurate gauges to compare condos, rose to $742, compared to $587 a year ago.

The cost of a newly built single-family home, including detached, semi-detached and traditional town houses, has risen 40 per cent in the last year to $1.25 million from $887,543.

A new detached home averaged $1.72 million last month, up 9 per cent since May.

But the supply of new-build homes is an ongoing problem, said Tuckey, who appealed to the government to help builders make more new homes, particularly low-rise housing, available.

BILD statistics show there were only about 11,000 new homes on the market in June, compared to about 18,000 in the same month last year. Ten years ago, about half of the 30,300 new homes available were single-family dwellings.

"The challenges builders face, including the lack of serviced and permit-ready developable land and out of date zoning bylaws continue to impact the supply of housing," said Tuckey in a press release.

As new home sales surged in June, the number of re-sale transactions declined 37 per cent year-over-year, according to the Toronto Real Estate Board.

Although it reported a 6.3 per cent year-over-year increase in the average re-sale home price that month, the cost of a re-sale home actually dropped about 8 per cent or $70,000 between May and June this year as listings increased for the third month.