Altus Group Report Reveals Challenging Month for Toronto’s Housing Sector
Toronto – BUSINESS – The Greater Toronto Area’s (GTA) new home market encountered a sluggish August, marked by a notable decline in sales, according to a recent report released by the Building Industry and Land Development Association (BILD). As interest rates took an upward turn, the GTA experienced its second-lowest August for new home sales since Altus Group began tracking data in 2000.
- August Sees 52% Increase in Sales YoY but Lags Behind 10-Year Average by 63%
Altus Group, BILD’s official source for new home market intelligence, reported a total of 711 new home sales in August. This figure reflected a 52% increase compared to the same month in 2022. However, it was a stark contrast to the 10-year average, lagging behind by a significant 63%.
- Condominium Apartments Suffer 66% Drop Below 10-Year Average
Condominium apartments, encompassing units across low, medium, and high-rise buildings, stacked townhouses, and loft units, accounted for 443 units sold in August. While this marked a 15% increase from August 2022, it still trailed behind the 10-year average by a substantial 66%.
- Single-Family Home Sales Surge, Yet Remain 56% Below 10-Year Average
In a surprising twist, there were 268 single-family home sales in August, a staggering 227% increase from August 2022. However, even with this surge, single-family home sales remained 56% below the 10-year average. This category includes detached, linked, semi-detached houses, and townhouses (excluding stacked townhouses).
- Inventory Declines, but Remains Above Balanced Market Levels
The total new home remaining inventory decreased compared to the previous month, totalling 16,139 units. This comprised 14,242 condominium apartment units and 1,897 single-family lots, equating to 13.7 months and 4.5 months of inventory, respectively, based on average sales over the past year. A balanced market typically maintains 9-12 months of inventory. Remaining inventory encompasses units in pre-construction projects, those under construction, and completed buildings.
- Interest Rates Continue to Pose Challenges
Edward Jegg, Research Manager at Altus Group, highlighted, “While August is typically a slower buying month, the return of the interest rate hikes further dampened GTA new home sales.” Justin Sherwood, SVP Communications & Stakeholder Relations at BILD, echoed this sentiment, stating, “Interest rates remain a barrier for prospective new home buyers in the GTA.”
- Benchmark Prices Show Slight Increase in August
Benchmark prices in August saw a modest increase compared to the previous month. The benchmark price for new condominium apartments stood at $1,089,012, down 8.5% over the last 12 months. Meanwhile, the benchmark price for new single-family homes was $1,726,092, showing a decrease of 7.3% over the same period.
The GTA’s housing market remains under the influence of various factors, including interest rate fluctuations and housing supply. BILD continues to advocate for a diverse mix of housing types to ensure that families can find suitable homes even in challenging market conditions.
With a membership of 1,200 companies, BILD serves as the voice of the home building, residential and non-residential land development, and professional renovation industries in the Greater Toronto Area. The sector contributes significantly to the region’s economy, providing 256,000 jobs and an investment value of $39.3 billion. BILD is affiliated with the Ontario and Canadian Home Builders’ Associations, advocating for a robust and sustainable housing market.