May new home sales: Record-breaking lows and what this

Toronto, June 26, 2024 (GLOBE NEWSWIRE) -- Greater Toronto Area, June 26, 2024 – Greater Toronto Area (GTA) new home sales remained slow in May, with monthly sales hitting lows not seen since the pandemic-impacted May 2020. Year-to-date sales from Jan-May 2024 are also sitting at a record-breaking low at 39 per cent below Jan-May 2009, the Building Industry and Land Development Association (BILD) announced today.

There were 936 new home sales in May, which was down 71 per cent from May 2023 and 71 per cent below the 10-year average, according to Altus Group*, BILD’s official source for new home market intelligence.

“New home sales across the GTA continued to languish in May under the weight of elevated prices and high interest rates,” said Edward Jegg, Research Manager with Altus Group. “Despite the rate drop earlier this month, additional relief will be required to coax prospective buyers back into the market.”

Condominium apartments, including units in low, medium and high-rise buildings, stacked townhouses and loft units, accounted for 539 units sold in May, down 75 per cent from May 2023 and 75 per cent below the 10-year average.

There were 397 single-family home sales in May, down 65 per cent from May 2023 and 61 per cent below the 10-year average. Single-family homes include detached, linked and semi-detached houses and townhouses (excluding stacked townhouses).

Total new home remaining inventory increased compared to the previous month, to 20,427 units. This includes 16,845 condominium apartment units and 3,582 single-family dwellings. This represents a combined inventory level of 14.5 months, based on average sales for the last 12 months. This remains an exceedingly high inventory level, maintaining the trend seen since the fall of remaining inventory levels hovering consistently near the 20,000 mark.

“The continuing record lows in new home sales is a flashing check engine light on the dashboard. Today’s sales are tomorrow’s starts. It is inevitable that we are entering further tight supply conditions in the next two to three years,” said Justin Sherwood, SVP Communications & Stakeholder Relations at BILD. “Not only are high interest rates keeping buyers on the sidelines, but higher rates are making financing for new projects more difficult and expensive. When combined with higher construction costs, land costs and material costs and increasing government fees and taxes, the new home industry in the GTA is slowing down precipitously and new home supply in the 2025-2027 time period will reflect this. To avoid future lack of supply driven price appreciation, we need all parties, all levels of government, CMHC and the industry to sit down and arrive at collaborative solutions that will support those seeking to call the GTA home.”

Benchmark prices decreased in May for both single-family homes and for condominium apartments compared to the previous month. The benchmark price for new condominium apartments was $1,043,861, which was down five per cent over the last 12 months. The benchmark price for new single-family homes was $1,612,515, which was down seven per cent over the last 12 months.

With 1,200 member companies, BILD is the voice of the home building, residential and non-residential land development and professional renovation industries in the Greater Toronto Area. The building and renovation industry provides 256,000 jobs in the region and $39.3 billion in investment value. BILD is affiliated with the Ontario and Canadian Home Builders’ Associations.

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For additional information or to schedule an interview, contact Janis McCulloch at jmcculloch@bildgta.ca or 416-617-7994.

*Altus Group should be credited as BILD’s official source of new home market intelligence.

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