New-home prices surged in the Greater Toronto Area this February even as the average resale price of a home slumped 12.4 per cent from a year, suggests numbers from industry observer the Altus Group.

The benchmark price of a new condo, which includes units in low-, mid-, and high-rise buildings as well as stacked townhouses, hit $729,735 in February, up a smoking 39.5 per cent over the same month last year. Meantime, for single-family homes the benchmark price was $1,229,454, an increase of 12.8 per cent from a year ago. Whereas the Toronto Real Estate Board’s resale prices are based on sold prices, Altus Group’s benchmark goes by what builders have priced available homes at in a given month.

“Tight supply continues to drive pricing levels,” says David Wilkes, president and CEO of the Building Industry and Land Development Association, or BILD, which releases monthly Altus data. “This is especially true when it comes to single-family homes,” he adds in a news release. In all, there were 12,896 new homes for sale across the GTA last month, representing “a modest increase,” according to BILD. But a vast majority (9,285) were condos, with only 3,611 of the available homes being single-family dwellings.

“While single-family new home inventory is up from last year, it is still quite low in historical terms,” states Patricia Arsenault, Altus Group’s executive VP, research consulting services. “Moreover, there is a dearth of new single-family product that is affordable to a broader range of buyers—fewer than one in five single-family homes available to purchase at the end of February were priced below $750,000.”

Nonetheless, in February, new home sales totalled 2,159, up from the previous month but far below activity recorded in the second month of 2017, when buyers snapped up 5,243 homes. Toronto proper saw the most activity with 976 sales, followed by York Region at 800. However, the composition of homes sold last month differed drastically from area to area. For instance, just three new single-family homes were sold in Toronto, while 117 were purchased in Halton, the most of any GTA municipality.

BILD’s Wilkes cited several hurdles the building industry faces in terms of increasing the GTA’s stock of new housing. “We encounter excessive red tape, out-of-date zoning, and lack of developable land serviced with critical infrastructure,” he says in a statement. “That is why, as the municipal elections approach, we’ll be initiating public conversations about ways policy makers, urban planners, our industry and residents can work together to address the GTA’s housing supply challenge,” Wilkes adds.

 

Photo Credit: JasonParis​