New home sales fall victim to new lending restrictions

GREATER TORONTO, Nov. 21, 2012 /CNW/ - Stricter lending restrictions have led to a drop in consumer confidence and affordability, causing new home sales to decline for the third consecutive month, the Building Industry and Land Development Association (BILD) reported today.

According to RealNet Canada Inc., BILD's official source of new home market intelligence, 2,792 new homes were sold in October, which is the second-lowest October record. Due to three low sales months in a row, year-to-date sales of 29,322 new homes across the GTA have slipped to 14 per cent below the long-term average - the third-lowest in BILD's records.

The high-rise sector still holds a prominent share of the market, with 1,914 sales in October 2012 totalling the fifth-highest October on record.

"In an attempt to cool down the market, the federal government has severely affected the building and development industry in the GTA," said BILD President and CEO Bryan Tuckey. "The introduction of stricter mortgage regulations has triggered a decline in new home sales, and if this trend continues, it will affect job creation in the coming years, restricting economic growth."

The building and development industry plays a key role in the economic prosperity of the GTA and the Province of Ontario. Last year alone, the industry created 193,300 jobs and paid $10.1 billion in wages.

Tuckey added that first-time home buyers are those most affected under the new rules, which have taken a considerable portion of potential purchasers out of the market.

The RealNet New Home Price Index for a low-rise home rose 16 per cent over October 2011 to $616,623 while pricing for high-rise homes increased 2 per cent to $439,328.

BILD will continue to monitor this trend as new projects enter the market in the coming months.

A statistical backgrounder can be found here. Contact Andrei Zaretski at azaretski@bildgta.ca or Amy Lazar at alazar@bildgta.ca for more information.

Oct '12 Low Rise High Rise Total
Region 2010 2011 2012 2010 2011 2012 2010 2011 2012
Durham 156 252 214 9 10 12 165 262 226
Halton 300 364 98 199 127 36 499 491 134
Peel 213 503 275 136 71 233 349 574 508
Toronto 123 75 13 2,627 1,983 1,426 2,750 2,058 1,439
York 569 437 278 413 877 207 982 1,314 485
GTA 1,361 1,631 878 3,384 3,068 1,914 4,745 4,699 2,792
Jan-Oct 13,655 15,207 12,758 17,464 23,814 16,564 31,119 39,021 29,322

With more than 1,375 members, BILD, formed through the merger of the Greater Toronto Home Builders' Association and Urban Development Institute/Ontario, is the voice of the land development, home building and professional renovation industry in the Greater Toronto Area.  BILD is proudly affiliated with the Ontario and Canadian Home Builders' Associations.

 

 

SOURCE: Building Industry and Land Development Association

For further information:

Amy Lazar 
Manager, Communications
416-391-3452 or 416-543-3903
alazar@bildgta.ca 

Andrei Zaretski
Manager, Marketing & Media Relations
416-391-3450 or 416-843-4898
azaretski@bildgta.ca