Toronto

Altus: Toronto New Home Sales Almost Double, Expected To Cool

Greater Toronto new home sales were busy last month, but are expected to slow. Altus Group data shows new home sales nearly doubled last year’s volume in March. The rise in sales was met with no new project launches, causing inventory to tighten. Many buyers shrugged off the pandemic, but the firm’s analysts expect the enthusiasm to fall off in the following months.

Condo Prices Rise Over 25%, Detached Prices Flat

Greater Toronto new home buyers were pushing prices higher in March. The new condo apartment benchmark price reached $983,133 in March, up 25.9% from last year. The single-family benchmark hit $1,115,869, down 0.1% from last year. Condo apartment prices were printing new all-time highs in the month. Detached prices are still about 10% lower than they were at peak.

Greater Toronto New Home Sales Rise 67%

Greater Toronto new home sales were much higher than they have been in the past few years. There were a total of 3,780 new homes sold in March, up 67% from last year. Condo apartments represent 2,840 of the units sold, up 108% from last year. Single-family sales represent the other 890 units sold, up 2.4% from last year. It’s a huge improvement, but as we can see the past two years were slow relative to regular volumes. The past 3 Marches all have volumes rarely seen outside of a recession.

Greater Toronto New Home Sales

Total March new home sales in Greater Toronto.

Source: Altus Group, Better Dwelling.

New Home Sales In The City Almost Doubled

The City of Toronto took the lead from York Region, as the busiest new home sale region in the GTA. The City represented 1,870 of the new home sales, up 96% from last year. Breaking it down, 1,848 of those sales were condo apartments, up 112% from last year. Single-family homes were the other 22 sales, down 73% from last year.

Greater Toronto New Home Sales

Total new home sales in Greater Toronto for March, by region.

Source: Altus Group, Better Dwelling.

No New Project Launches In Greater Toronto

Greater Toronto new home inventory dropped significantly last month. There were 13,933 new homes for sale in March, down 18.98% from a month before. This represents a decline of 17.05% from last year. While inventory dropped quickly, it’s important to note part of the reason is due to a lack of new projects. No new projects launched in the month – and in fact, some projects were cancelled or delayed.

Sales To Active Listings Ratio Increases

The drop to inventory and climb in sales, pushed the sales to active listings ratio (SALR) higher. The ratio reached 26.77% in March, compared to 13.30% from last year. Generally, analysts expect prices to rise when the ratio is above 20%. Prices are expected to fall when the ratio falls below 12%. When the ratio is between 12% and 20%, the market is considered to be priced right for demand during the period.

Greater Toronto New Home Sales To Active

The ratio of sales to active listings for new homes in Greater Toronto, for the month of March.

Source: Altus Group, Better Dwelling.

Greater Toronto’s new home buyers weren’t (yet?) deterred by the pandemic in March. Altus Group did add they expect things to cool down in April. This is partially due to a near shutdown of the economy, as well as rapidly changing fundamentals. However, amidst early pandemic warnings, buyers were more concerned about FOMO than the pandemic.

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6 Comments

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  • Reply
    Ian 1 month ago

    I keep seeing data points from Q1 2019 and 2018 that show weak sales. What’s the deal with that?

  • Reply
    FOMO 1 month ago

    10,000 companies have applied for a wage subsidy already, meaning 10,000 companies experienced a loss of 30% or more in revenue. What are people thinking?

  • Reply
    straw walker 1 month ago

    Presales of concrete condo are considered as “new home ” sales..
    It will be 3 to 4 years before these units are finished for sale …These presale buyers are purely speculating and are guessing that the market will be virus free and strong in 4 years so they can sell their presale for a profit.

  • Reply
    Steve 1 month ago

    This is the dichotomy that is the Toronto, and the Canadian housing market in general. The previous article on Better Dwelling was talking about the large increases in insolvency, and unemployment in Toronto, and the next one is stating that both condo, and detached homes are hitting new highs. These articles are both pre Covid-19, but you still have to scratch your head trying to make sense of it all. Obviously, an average can be manipulated in a number of ways along with most statistics. In an attempt to compare apples to apples the average household income in Toronto as per Area Score is $89, 102.00 while the average condo price is $983,133 (up 25.9% year over year!). With the aforementioned income, and a down payment of $100,000 most bank would lend you in the range of $530,000 – keeping it simply I’m assuming 2.5% mortgage rate, and no debt or condo fees. To get a mortgage to afford the ‘average’ condo in Toronto you would need a down payment in the $300,000 range. This kinda looks like a speculator driven bubble to me that was already getting ready to pop, even before Covid-19 came along. The International Monetary Fund is of the opinion that Toronto housing is 50% over valued base upon underlying income (Hamilton came out on top at 57%). I personally believe that the Federal, and Provincial governments will try to prop up this housing market – I’m not sure if they have enough money to do without bankrupting the country.

  • Reply
    Naiyer 1 month ago

    Buyers are not shrugging off the pandemic, but the impact is yet to come. This Covid thing is not going away soon and we will see the real impact in coming quarters and even next year.

  • Reply
    Jimmy 1 month ago

    The risk in the system is being transferred to the Canadian tax payer as we speak through quantitative easing and money distributed to business and individuals. I am a little concerned that so many are requiring hand outs. It has only been 6 weeks. No cash at all on hand? I hope it all works out but I am deeply concerned. I little paper napkin math and it starts to look really bad 7 million on cerb aprox work force of 20 million…Sorry lost track of hand outs but fed tax rev was 300 billion we handed out 22 billion through cerb alone in 6 weeks. Has anyone done the total hand out math so far?

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