New home market sees short-term relief in April but fundamental challenges remain

TORONTO, May 23, 2018 /CNW/ - In April the new home market in the GTA saw lower sales and an increase in remaining inventory, as well as a decrease in prices, the Building Industry and Land Development Association (BILD) announced today.

There were 1,727 total new home sales in April, according to Altus Group, BILD's official source for new home market intelligence. It was the lowest number of sales for April in over 20 years. Single-family home sales, with 502 detached, linked and semi-detached houses and townhouses (excluding stacked townhouses) sold, were down 65 per cent from last April and down 70 per cent from the 10-year average. Condominium apartments in low, medium and high-rise buildings, stacked townhouses and loft units accounted for 1,225 new home sales, down 65 per cent from April 2017 and down 38 per cent from the 10-year average.

"While home-buying intentions remain strong, a combination of challenges is keeping many interested buyers out of the new home market this spring," said Patricia Arsenault, Altus Group's Executive Vice-President, Research Consulting Services. "First-time buyers need to save longer to qualify for a mortgage, and potential move-up buyers are faced with a bigger gap than a year ago between the price of a newly-built home and the price they can get for their existing home."

The lower number of sales, combined with a number of new project openings that was typical for this time of year, meant that remaining inventory increased for both single-family homes and condominium apartments in April, with total new home remaining inventory at 14,297 units. This included 9,958 condominium apartments and 4,339 single family homes. While this is an improvement by 14.8 per cent over the previous month's 12,457 remaining units, it is still only about five months' worth of inventory, while a healthy new home market would have nine to 12 months' worth of inventory, based on the pace of sales in the past 12 months.

The benchmark price for new single-family homes decreased in April to $1,151,815, which was down 5 per cent over the last year, and the benchmark price for new condominium apartments decreased to $739,965, which was 29.8 per cent above last April.

"It is obvious that government action is having an impact on demand in the new home market," said David Wilkes, BILD President and CEO. "We have 115,000 new residents coming to the GTA every year and we need to be building 55,000 new homes annually to meet their housing needs. Government policy needs to recognize the need to increase housing supply as part of a long-term solution for our region."

April New Home Sales by Municipality**:

April 2018	Condominium Apartments			Single-family			Total
Region	2018	2017	2016	2018	2017	2016	2018	2017	2016
Durham	8	26	33	103	337	354	111	363	387
Halton	65	130	89	75	101	342	140	231	431
Peel	269	1,074	163	152	443	902	421	1,517	1,065
Toronto	509	1,637	1,380	11	50	110	520	1,687	1,490
York	374	584	351	161	519	601	535	1,103	952
GTA	1,225	3,451	2,016	502	1,450	2,309	1,727	4,901	4,325

Source: Altus Group

With 1,500 members, BILD is the voice of the home building, land development and professional renovation industry in the Greater Toronto Area. BILD is proudly affiliated with the Ontario and Canadian Home Builders' Associations.

*Altus Group should be credited as BILD's official source of new home market intelligence.
**Historical data are subject to revisions.

SOURCE Building Industry and Land Development Association

To schedule an interview, contact John Provenzano, BILD Communications and Marketing Manager at [email protected], [phone].