The number of homes available to buyers in the Greater Toronto Area (GTA) continued its drop to “unprecedented levels of scarcity” last March, according to the Building Industry and Land Development Association (BILD).
GTA’s housing supply challenges resulted in record smashing prices, continued unprecedented inventory scarcity, and a never seen before level of new condo apartments sales, the group added.
There were only 10,153 homes available to buyers in builder inventories, according to Altus Group, BILD's official source for new-home market intelligence. This represented an almost 50% drop from March 2016, when there were 21,006 homes available to buyers.
"The ongoing decline in new housing inventory is a direct reflection of how difficult it is for the industry to bring product to the market," said BILD president and CEO Bryan Tuckey. "The hurdles builders face keep getting higher.”
"There are ongoing major challenges with a lack of serviced and permit ready developable land and out of date zoning bylaws. The complexity and time it takes to get the vast numbers of approvals and permits necessary to build have increased dramatically in recent years," he added.
BILD said available supply of new single-family low-rise homes, which includes detached, semi-detached and townhomes, has taken a nosedive since 2007. There were 932 of them available at the end of March – a decade ago, the figure stood at 17,854.
"The inventory numbers are telling us very clearly that not enough new housing and not the right mix of housing is being built to keep up with consumer demand or our housing needs," says Tuckey. "The industry is following the Province's intensification policy and building and selling far fewer low-rise homes than a decade ago, but demand for single-family homes has not dropped."
New low-rise homes cost an average of $1,124,600 in March, up more than $40,000 from February and an increase of 32.4% from a year ago. The price for available new detached homes hit $1,783,417 in March, an increase of $716,711 in just one year.
Meanwhile, the average price of condo apartments in high-rise and mid-rise buildings and stacked townhomes stood at $532,792, with the average price per square foot at $666, and the average unit size 800 square feet. Nearly 80% of the new homes that were purchased in the GTA in March were condo apartments in high-rise and mid-rise buildings and stacked townhomes, said BILD.
Last month was the biggest month for sales of new condo apartments in the GTA with 4,500 units sold
"The record number of condominium apartment sales in March was boosted by recent launches of product in prime locations – more than half of March sales were in projects opened in February or March," said Patricia Arsenault, Altus Group's executive vice president of Research Consulting Services. "Demand continues to be fueled by end-user buyers who are shifting their expectations towards more attainable product, as well as by investors whose presence will help ensure a steady stream of new rental housing supply in the years to come."
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