Developers are finding it harder to sell newly-built homes in the Greater Toronto Area this spring.
Sales of new homes in the GTA in April totalled just 1,727, the lowest number for April in 20 years according to data from Altus Group highlighted in a report from the Building Industry and Land Development Association (BILD).
"While home-buying intentions remain strong, a combination of challenges is keeping many interested buyers out of the new home market this spring," said Patricia Arsenault, Altus Group's Executive Vice-President, Research Consulting Services. "First-time buyers need to save longer to qualify for a mortgage, and potential move-up buyers are faced with a bigger gap than a year ago between the price of a newly-built home and the price they can get for their existing home."
There were 502 detached, linked, and semi-detached houses and townhouses sold, 65% fewer than in a year earlier and 70% below the 10-year average.
Condo sales were also down 65% year-over-year with 1,225 sales, 38% below the 10-year average.
Combined inventory was around 5 months of supply at current pace and totalled 14,297 units, up 14.8% compared to March.
The benchmark price for new single-family homes decreased in April to $1,151,815, which was down 5% over the last year, and the benchmark price for new condominium apartments decreased to $739,965, which was 29.8% above last April.
Government policy is having an impact
BILD president and CEO David Wilkes said the government’s policy measures is having an impact on demand but says it needs to take a long-term view of housing requirements in the GTA.
"We have 115,000 new residents coming to the GTA every year and we need to be building 55,000 new homes annually to meet their housing needs. Government policy needs to recognize the need to increase housing supply as part of a long-term solution for our region," he said.