Toronto

Greater Toronto New Home Sales Fall To Lowest Level In Over A Decade

Greater Toronto new home buyers are holding back, especially when it comes to condo apartments. Altus Group data shows prices increased in June, with new condos hitting a all-time high. The price increase was driven by low demand though, as sales almost completely halted. Fewer than one in five new homes were sold last month, and it was even worse for condo apartments.

The Few Greater Toronto New Home Buyers Left Are Paying More

New condo apartment prices continue to rise at a rapid pace, with the smallest gap between single-family homes in a decade. The benchmark price of a single-family home reached $1,141,848 in June, up 3.90% from the same month last year. The condo benchmark reached $999,228, up 24.19% over the same period. Single-family homes are down just over 12% from their all-time high, while condo apartments are at a new all-time high for prices. This is the narrowest gap between the two since the Great Recession.

Greater Toronto New Home Sales See Worst June In At Least 10 Years

Last month was one of the slowest Junes for Greater Toronto new home sales in at least a decade. There were 1,934 new homes sold in June, down 42% from a year before. Single-family homes actually saw a significant uptick with 1,160 sales, up 24% from last year. Condo apartments weren’t so lucky, dropping to just 774 sales, down 68% over the same period. The drop in total sales is due entirely to condo apartment demand disappearing.

Greater Toronto New Home Sales

Total June new home sales in Greater Toronto.

Source: Altus Group, Better Dwelling.

City of Toronto New Condo Sales Leading Decline Lower

Breaking down those numbers, the new homes in the City of Toronto are responsible for most of the drop. There were just 420 new homes sold in the City, down 71.31% from the same month last year. Condo apartments represented 414 of those sales, down 71.56% over the same period. There were just 6 single-family homes sold, down 25% – a big drop, but overall not enough units to care. The big takeaway here is the lack of condo apartment sales, which have next to disappeared.

Greater Toronto New Home Sales

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

Source: Altus Group, Better Dwelling.

Less Inventory, As Developers Hold Back On New Project Launches

Falling sales meant developers are pressing pause on new launches, and letting inventory wind down. There were 13,863 new home listings in June, down 27% compared to last year. This is the lowest level for June inventory since 2017, but it’s also a very different market from that June. There’s significantly less demand for new homes.

Fewer Than One In Ten Greater Toronto Condo Apartments Sold

The sales to active listings ratio (SALR) dropped to the lowest level in years for the month of June. The ratio fell to just 13.95% in June, down from 17.58% a year before. The ratio for condo apartments is now just 8%, which is when prices typically begin falling. In June 2017, when inventory was last at this low, the SALR was 52.87%. As previously stated, the low inventory is less of a problem with demand disappearing this fast.

Greater Toronto New Home Sales To Active

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

Source: Altus Group, Better Dwelling.

Prices are moving higher, but demand is splitting. The issue with this is fewer transactions mean fewer points of validation for market acceptance of prices. When less than 1 in 5 homes are being sold, buyers aren’t necessarily representative of the correct direction of price movement. As for condo apartments, which are seeing a rise of inventory in resales, fewer than one in ten are selling.

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15 Comments

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  • Reply
    Mortgage Guy 4 months ago

    Kind of hard to make money buying and flipping airbnbs, when airbnb is dead.

  • Reply
    Scott MacKinnon 4 months ago

    So, its a good thing I sold my house?

    • Reply
      Terrance 4 months ago

      You’re suppose to just keep acquiring them, and keeping it empty.

  • Reply
    James Wilson 4 months ago

    Why would anyone pay for a condo, when they have no idea what the level of uncertainty is for the amenities around it? Restaurants are closing by the hundreds. There’s going to be a shift in where the city’s amenities are relocated, assuming they’re relocated soon.

    • Reply
      Ahmed 4 months ago

      Sales pitch, “It’s surrounded by blocks of empty spaces, you’re walking distance to a tent village, and the PATH will be closed until next year probably.”

    • Reply
      Hugh Welland 4 months ago

      In my neighbor hood places are closing left and right. I’m thinking of adding a public restroom (pay toilet) to my property to make a bit of extra money.

  • Reply
    Rob 4 months ago

    Price capitulation next logical event
    How bad will the future economy get is unknown
    In my opinion an L shape recovery is looking possible
    The real estate industry’s optimistic narrative may cause a lot of tears for first time home buyers
    Younger people don’t realize real estate prices can go down and remain stagnant for along time

    • Reply
      SH 4 months ago

      Younger people? Boomers were predominantly piling into rental condo investment/speculation, so they don’t seem to realize either.

  • Reply
    Rob 4 months ago

    How about “greater fool” ? 🤣
    Better?🤷‍♂️

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