Average price for GTA low-rise home exceeds $900,000

By Staff | August 22, 2016 | Last updated on August 22, 2016
3 min read

The average price of a new low-rise home in the GTA has surpassed $900,000 for the first time, says the Building Industry and Land Development Association (BILD).

The average price of new detached and semi-detached houses and townhomes was $906,508 fror July–that’s a 12% increase from July 2015.

Semi-detached homes showed the strongest price increase, growing by $196,546 in just one year. These homes reached a new record high of $771,530. For townhomes, the average price was $758,434, an increase of $122,491 over last year.

The price of single-family detached homes in July was $1,095,910. They first surpassed the $1 million mark in March of this year.

Read: Don’t compare the booms in Toronto, Vancouver real estate

High-rise homes grow in size, price

The price of high-rise homes in the GTA also reached new heights in July. The new $475,764 average is a 7% increase over last year, and is attributed to increases in price per square foot and larger suite sizes. For example, the average price per square foot climbed to $594. And, suite sizes for mid and high-rise condo units increased to an average of 801 square feet.

“In previous years, many builders were focusing on offering smaller and more affordable units to help first-time buyers enter the market,” says BILD president and CEO Bryan Tuckey. But, “recent months have seen the introduction of larger suites to meet the demands of the growing range of buyers who have been priced out of the low-rise market.”

He adds, “New low-rise home prices have grown exponentially due to limited supply. Provincial intensification policies, delays in the approvals process and a lack of serviced developable land in the GTA has reduced the amount of new homes coming to the market.”

Read: Would more rental units make the GTA more affordable?

Record-low supply

The supply of new homes in builders’ inventory has fallwn to a 10-year low, with just 17,213 new homes available for sale in all of the GTA as of July 31. This is a 41% decrease from a decade ago, when inventory levels were at 29,238 homes.

Only 1,568 of those homes were ground-related, which is another record low. Consider that this is less than half the homes available in July 2015, when there were 4,550. Also, it’s dramatically fewer than the 16,424 available for purchase in July 2006.

High-rise supply also declined in July, falling to 15,645 units. The most significant decrease was in the pre-construction stage units, which were down 25% from last year to 8,499.

Read: Feds ask CMHC for ways to cool housing prices

A look at new home sales

One factor driving price surges is lack of supply. In fact, sales of new homes and condominiums in the first seven months of 2016 were the highest in 10 years.

So far this year, there were 28,208 homes sold–of those sales, 15,852 were high-rise homes. That is 36% more than the 10-year average.

Low-rise sales have also been stronger than average so far this year (at 12,356) but they are down 7% from the last year.

New-home sales in July were up 12% from 2015, and 9% above the 10-year average with 3,131 transactions. The majority of the sales came from the high-rise market, with 2,226 homes sold (a 52% increase since last July).

Meanwhile, low-rise sales fell to 905 homes in July, down 32% from the previous year.

“The industry’s biggest challenge is bringing enough new homes to market to satisfy demand,” Tuckey says. “Projects are being sold as soon as they come to market, which is driving up prices and reducing choice for new-home purchasers.”

Read:

A detailed breakdown of new-home sales in municipality across the GTA can be found below.

July new home sales by municipality:

July ’16

Low-rise

High-rise

Total

Region

2014

2015

2016

2014

2015

2016

2014

2015

2016

Durham

250

214

357

20

21

165

270

235

522

Halton

232

178

43

264

68

77

496

246

120

Peel

390

476

104

52

94

142

442

570

246

Toronto

80

41

98

911

977

1,656

991

1,018

1,754

York

353

431

303

267

301

186

620

732

489

GTA

1,305

1,340

905

1,514

1,461

2,226

2,819

2,801

3,131

Jan-July

11,169

13,268

12,356

12,552

12,662

15,852

23,721

25,930

28,208

Source: Altus Group

Advisor.ca staff

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.