Greater Toronto new home prices are finally starting to cool. Data from Altus Group and BILD GTA shows new home prices fell in April. Fewer sales and more inventory definitely contributed to softer prices. However, inventory is still very tight compared to historic levels. More likely, the threat of rising rates deflated exuberance, driving prices over $50,000 lower.
Greater Toronto New Homes Prices Fell Over $50,000 In A Month
Greater Toronto new home prices are tumbling from all-time highs. The benchmark price of a new single-family home reached $1,787,200 in April, down 2.8% ($51,200) from a month before. It was the second consecutive month prices contracted for single-family homes.
Greater Toronto New Home Benchmark Price
The condo apartment segment had been more resilient, but it’s now falling faster. The new condo benchmark slipped to $1,189,100, down 5.1% ($63,400) from a month before. It was the first time new condo prices have fallen in months, but in one month it nearly wiped out all of 2022’s gains. A 5 point drop is a big shift in sentiment.
Greater Toronto New Home Sales Are Normalizing
Greater Toronto new home sales cooled from record highs, normalizing to 2019-levels. There were 571 new single-family homes sold in April, down 47% from last year. Condos came in at 3,074 units, down 24% over the same period. It’s been an odd past few years, but the total volume of new home sales now resembles pre-2020 years. It’s also probably worth noting that volumes are now below the 2015 to 2017 boom, as well.
Greater Toronto New Home Inventory Is Up But Still Tight
Greater Toronto new home inventory is rising but still relatively tight. There were 9,327 units remaining at the end of April, an increase of 15.9% from a month before. This was due to a number of new project launches, in addition to less demand. Pressure on inventory is still tight but being rapidly relieved. It might sound like a lot of units but it hasn’t even breached the 2022 high, never mind resembling anything normal.
Greater Toronto new home sales are cooling and inventory is becoming healthier. However, prices are falling much faster than the decline in inventory would support. There’s still relatively few units compared to historic levels. It’s also too early for higher rates to be behind the throttling, but not for it to have a psychological impact. Exuberance can disappear as fast as emotions can change.