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New home prices see slight decline in October

New home prices see slight decline in October

October saw a modest increase in supply and mix of new homes in the GTA, as well as a slight decrease in average prices, the Building Industry and Land Development Association (BILD) announced November 22.

The average price of new lowrise homes, which includes detached and semi-detached homes and townhomes, was $937,689 in October, according to Altus Group, BILD’s official source for new-home market intelligence. This is a $54,702 decline from September but a 17 per cent increase from this time last year. The average price per square foot was $394, a slight increase from September.

“The industry is doing what it can to provide new homebuyers with ground-related choices that they can afford,” said BILD president and CEO Bryan Tuckey. “Builders brought more semi-detached homes and townhomes to market in October than in previous months and they are smaller and more affordable than single-detached homes.”

Lowrise supply increased slightly from September. There were 2,282 new lowrise homes available for purchase in builders’ inventory. Despite the increase, supply levels are still a fraction of what they were a decade ago and offer less than two months of inventory based on recent purchase trends.

There were 1,621 new lowrise homes sold in October, down 10 per cent from the same time last year but above the 10-year average. Of those sold, 802 were detached homes, which is a 16 per cent decline from October 2015.

“The October numbers confirm that buyer interest in the GTA new home market continues to be strong,” said Patricia Arsenault, executive vice president of research consulting services at Altus Data Solutions. “The additional townhouse product recently released is welcome news for those seeking more affordable lowrise options.”

Two-thirds of the lowrise sales in October took place in York and Halton regions.

There were 2,421 highrise homes sold in October, which is down 27 per cent from a year ago, but overall highrise sales are still on pace for a record year with 23,189 sales to date.

Prices of new highrise homes in October declined slightly to $483,656, but that is still 10 per cent above last year’s average. The average price per square foot in the highrise market fell to $594, a modest decrease from September but up 4 per cent from October 2015.

The decline in highrise prices is due to the increasing number of new project launches outside downtown Toronto and in other parts of the GTA where prices are lower. Ten of 15 projects launched in October were in the 905 region, compared to seven of 20 a year ago.

Supply of new highrise homes in builders’ inventory increased slightly in October to 18,210 units. The increase came as a result of several new project launches in the GTA and mostly affected pre-construction condominiums.

“While inventory has grown slightly, it’s important to understand that one month does not a trend make and constrained supply is still a serious issue in the GTA,” Tuckey said. “What we are seeing in the market is how the development industry is implementing provincial intensification policies by building more affordable lowrise homes and a variety of highrise communities all over the GTA.”

With more than 1,450 members, BILD 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.