Results of 2014 new home market analysis 'a decade in the making'

REALNET® and BILD's Strategic Market Review Coincides with 10 Year Anniversary of Province's Greenbelt Legislation; Shows Record-Setting Low Rise Prices and Condo Completions

TORONTO, Jan. 20, 2015 /CNW/ - RealNet Canada Inc., the most trusted source for real estate information in Canada, and the Building Industry and Land Development Association (BILD), today released a Strategic Review of the GTA's 2014 new home market.  A decade since the provincial government introduced its Greenbelt legislation and began a policy shift toward greater urban intensification, the 2014 market saw the low rise new home price index reach record highs and a record number of high rise (condominium unit) completions.

"The results of the GTA housing market in 2014 were ten years in the making," noted George Carras, President of RealNet, Altus Group. "Our analysis of the 2014 market and the story the numbers tell is frankly less about the year that just passed and more about a policy decision made by the provincial government a decade ago. The desire to curb sprawl and encourage intensification has led to the continued condominium boom in the 416, spiking home prices and a widening price gap between low rise and high rise housing product."

Among the figures released in the Strategic Review, RealNet confirmed that the low rise new home price index in 2014 closed at a record high of $705,813 - an increase of 8% from 2013, while the high rise price index was $454,476 - an increase of 4% from 2013. Additionally, the price disparity between low rise and high rise homes widened in 2014, to a record setting gap of $251,337. 

The 2014 low rise market saw a significant bounce back from 2013 levels, selling 17,745 homes - representing $13 billion, an increase of 46% over last year.  While low rise supplies increased by 33%, sales outpaced supply by 1,437 units.

For the high rise sector, 2014 boasted the third highest sales of the last decade at 21,991 representing $10 billion. This comes in slightly under the 22,211 units sold in 2007, and the all time high recorded in 2011 of 28,492 units.  High rise sales also outpaced supply in 2014 by 2,254 units.

Total new homes sales in 2014 reached 39,736 or $23 billion, an increase of 41% from 2013.

"Sales of homes today translate into the jobs of tomorrow," said BILD President and CEO Bryan Tuckey, emphasizing that job creation and wage generation are two benefits of a strong sales year. "The building and development industry is a major economic engine in our economy, creating approximately 200,000 well-paying jobs in construction and related fields every year. Each construction crane you see is responsible for the creation of up to 500 jobs, and the wages earned from these jobs later show up as purchases across the GTA, further contributing to our growing economy."

The high rise market in 2014 saw a record number of condominium units completed (25,571), however the number of units under construction as at December 31st dropped to 51,305 a decrease of 13, 598 from the prior year.

Other data contained in the 2014 Strategic Review shows that the Index Size of a new condominium increased to 816 square feet as the supply shifted toward two bedroom units. The average price per square foot was $557, an increase of 2% from 2013.

RealNet's Strategic Review also reports 1,991 total new home sales in December 2014, including 815 low rise sales and 1,176 high rise sales.  While year-over-year there is no change in the high rise sales total, low rise totals for December are up over 40% from last year, and more than 2% over the ten year average.

"Every home that exists today was at one point a new home, and new home markets must operate within their given land use policy framework of the day," says George Carras.  "A decade after the introduction of intensification policies, the extremity conditions in the market impacting the price and supply of low rise and high rise homes does not signal the beginning of the end, but rather the end of the beginning." 

About RealNet Canada Inc.

RealNet Canada Inc. is a leading real estate information services company in Canada.  Founded in 1995, the Company's core information product provides coverage in both the commercial real estate investment and residential development markets, powering the decisions of firms involved in approximately 75% of the market activity.  RealNet Canada Inc. is an Altus Group company (www.altusgroup.com).

About BILD

The Building Industry and Land Development Association (BILD) is the voice of the land development, home building and professional renovation industry in the Greater GTA, representing over 1,400 member companies. The Association works to improve communication between the industry and government provide enhanced opportunities for its members, promote the welfare of the industry, and protect the interests of consumers.

SOURCE RealNet Canada Inc.

Danny Roth or Nisa Ahsan, Brandon Communications Inc., T. 416-850-0614, E. [email protected], [email protected]