Despite the implementation of the Ontario government’s Fair Housing Plan, the GTA new home market continues to grow quickly. All types of housing inventory — from condos to single-family detached homes — are selling swiftly, and prices are continuing to rise. Though the government had sought to artificially cool the market with a set of restrictions (especially upon foreign buyers), the plan has had little impact thus far on the GTA new home market.
Approximately 86 percent of the properties sold in May of 2017 were condos and 14 percent were low-rise, single-family homes. This disparity is due to lack of inventory and increasing prices, which have made it virtually impossible for most buyers to purchase a single-family home. Instead, buyers are trending towards townhomes and condominiums, which are conveniently located, offer superb amenities and — are more affordable.
The price of new condo apartments went up $30,000 from April to May, with an average price of $604,683. This is a 33 percent increase year-over-year. Low-rise, single-family homes are now selling at an average price of $1,222,699, which is an increase of $10,000 between April and May. Because single-family homes are substantially more expensive, they are not growing at a rate as fast as condominiums. Similarly, townhomes have now increased in average price over $1 million.
The supply of new homes at the end of May GTA inventory remained very low. Infact inventory was 8,000 units less than May 2016. 10,820 units total remained available to buyers in the GTA at the end of May, 9406 are condos and 1,414 are single-family homes. A year ago there were 19,209 new homes in inventory. Looking back to May 2006, 29,754 new homes were sitting in builder inventories, with 16,420 being single-family homes. The dramatic decline in inventory over the last 10+ years is very evident. Not to mention the shift from building single family homes to building more urban product such as condos. Overall condos continue to remain relatively affordable in the GTA being that Toronto is a world-class city. Comparable cities in the world are far more expensive on a price per square foot basis.
Despite the Fair Housing Plan, sales have been steady and prices are continuing to increase. Those who have been on standby, waiting to determine the effects of the Fair Housing Plan on new homes are going to find that, things are continuing to move forward. Those who wait may risk being priced out of the market — not just for a single-family home but even for a townhome or a condominium.