New home sales in the GTA remained “extremely low” in June, decreasing a whopping 60 per cent from a year prior and sitting 82 per cent below the 10-year average, a new report has found.
There were 510 new home sales last month, while the 10-year average is 2,801 sales, according to data analyzed by Altus Group for the Building Industry and Land Development Association (BILD) in a report released Thursday.
“It’s been several months now that we’ve been seeing record-low sales,” said Dave Wilkes, president and CEO of BILD. “The industry really has stalled.”
According to the association, sales were strong in May and June of 2023 but then began to drop.
A number of factors have compounded on each other to create the slowdown, Wilkes said.
Home-building costs are “too high for the market to absorb,” he said, with the report finding benchmark prices were about $1.5 million for a single-family home and $1 million for a condo unit in the GTA.
Economic uncertainty due to Canada-U.S. relations has also caused low consumer confidence, he said.
For both these reasons, sales of both condos and single-family homes are at “historic lows,” Wilkes added.
According to the report, this June had 217 condos sales in the GTA, a decrease of 67 per cent from the same time last year and 89 per cent below the 10-year average.
Single family homes accounted for 293 sales, a year-over-year decrease of 53 per cent and 62 per cent less than the 10-year average.
Inventory levels, meanwhile, are at their highest, the report said, with 22,254 new homes available in the GTA. Of those, 16,696 are condo units and 5,558 are single-family homes.
“They’re just not selling,” Wilkes said, adding that although the industry has seen decreases in costs for materials, labour, land and borrowing, he says he believes taxes remain a barrier to affordability for homebuyers.
Wilkes added that BILD is working with governments to find solutions, and the association is advocating for a comprehensive tax rebate program that could lower costs for homebuyers and encourage consumers to “return to the market.”
And while Wilkes said prices are still unaffordable for first-time homebuyers, he noted that now is a good time to buy.
“If you are in the market, conditions are favouring purchasers right now,” he said. “There is inventory available. The financing rates are low. Builders are looking to move that inventory, so there is that opportunity.”
