GTA home sales, inventory levels "well below" 10-year average in August

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Home sales and inventory levels across the Greater Toronto Area fell “well below” the 10-year average in August as benchmark prices rose yet again.

According to a new report from the Building Industry and Land Development Association (BILD), just 89 single-family homes were sold across the GTA in August.

The figure, courtesy of data from Altus Group, represents an 86% annual decline and is 87% below the 10-year average.

Despite the “quiet” market, the benchmark price for new single-family homes — which include townhouses and detached, linked, and semi-detached houses — was up 22.3% year-over-year in August to $1,861,587.

Sales of new condominium apartments, including units in low, medium, and high-rise buildings; stacked townhouses; and loft units, were down as well, albeit less so.

A total of 533 units were sold across the GTA in August, an annual decline of 83%, and 61% below the 10-year average. The benchmark price for new condo apartments hit $1,189,682, an annual increase of 11.2%.

“New home sales for August slowed in both the condominium apartment and single-family sectors as buyers and builders are in a wait-and-see mode amid the swirling economic uncertainty,” said Edward Jegg, research manager at Altus Group.

“However, buyers have been able to find product to purchase as builders continue to replenish the inventory pipeline.”

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Between July and August, total new home remaining inventory dropped to 10,412 units, more than 8,700 of which were condos.

The GTA has 3.5 months of condo inventory and 2.7 months of single-family inventory; a balanced market would hold between nine and 12 months of inventory.

“New home buyers and builders have taken a step back in the face of rising interest rates and inflation,” said Dave Wilkes, BILD president and CEO.

Wilkes recalled 2017, the year the mortgage stress test was introduced, as a “useful parallel.”

“[The test] resulted in artificially elevated interest rates. As sales of new homes slowed, so did construction, ultimately exacerbating our region’s housing challenge,” he recalled.

“The lesson is clear: now is not the time to take our foot off the gas as we strive to address the factors that contribute to our region’s housing supply and affordability challenges.”