Greater Toronto Area (GTA) new home sales spiked to the highest level in years. Altus Group’s May numbers show it was the highest number of sales in 16 years. Even though the month was higher, year to date sales are still some of the weakest in recent history. The boost in sales are likely due to lowering prices, and first quarter buyers that delayed their purchases.
Greater Toronto New Home Prices Fall From Peak
The price of a new home across Greater Toronto is down from peak – a lot if it’s a single-family home. The typical single-family home fell to $1,109,501 in May, down 3% from the same month last year. Prices are now down 15.3% from the peak home price reached in mid-2017. The annual pace of decline is larger than it was the month prior.
The price of a typical new condo apartment in Greater Toronto is higher than last year, but fell from peak. The typical condo reached $779,687 in May, up 2.8% from the same month last year. Prices are now down 2.98% from the peak price reached in January of earlier this year. It’s not a huge decline, but a nearly $6,000 per month discount is nothing to sneeze at either.
Greater Toronto New Home Sales See Biggest May In Over 14 Years
Greater Toronto new home sales surged to a record high for the month. Greater Toronto recorded 4,794 sales in May, up a massive 93.93% from last year. The City of Toronto represented 1,448 of those sales, up 2.76% from last year. This was the biggest May in at least 14 years for new home sales.
Greater Toronto New Home Sales
Total May new home sales in Greater Toronto.
Source: Altus Group, Better Dwelling.
Even with the record setting May, it’s too early to tell if the new home market is on the road to recovery. Year to date (YTD) sales were only 13,734 in May, up 45.25% from last year. Higher than last year, but YTD was still the second fewest in the past decade. It’s also worth noting that over 2,500 new homes have been cancelled YTD across Greater Toronto. Many of May’s buyer could be previous buyers that saw their units cancelled.
Greater Toronto New Home Sales YTD
Total YTD new home sales in Greater Toronto for May.
Source: Altus Group, Better Dwelling.
Breaking down sales numbers, new single-family homes are where most of the growth was located. There were 1,004 single-family homes sold in May, up 210.83% from the same month last year. The City of Toronto represented 42 of those sales, up 20% from last year. Stating the obvious here, but most growth for single family homes was in the 905 regions.
Greater Toronto New Home Sales
Total new home sales in Greater Toronto for May, by region.
Source: Altus Group, Better Dwelling.
Greater Toronto new condo apartment sales also made a big move from last year. There were 3,790 sales in May, up 76.36% compared to the same month last year. The City of Toronto represented 1,406 of those sales, up 2.33% from last year. Once again, most of the growth in sales was experienced in the suburbs.
Greater Toronto New Home Inventory Rises Over 23%
The number of new homes for sale is rising, even with all of the recent project cancellations. Greater Toronto new home inventory reached 17,111 units in May, up 23.54% from last year. The majority are condo apartments representing 12,537 of the units, up 34.15% from last year. Inventory increased, but not nearly as much as sales – which puts a little more pressure on stock.
The sales to active listings ratio (SALR) increased into a seller’s market once again. The SALR reached 28.02% in May, up 56.97% from last year. Even with the increase, the ratio is 25.28% lower than the ratio seen in 2017. When the ratio is below 12%, the market is considered a buyer’s market, and prices fall. Above 20% and the market is a seller’s market, where prices rise. Between 12% and 20% is considered balanced, and the market is priced right. These numbers are general guidelines, and tend to have to stay within a range to mean much. May would be the second month in 2019 to print above 20%.
Greater Toronto New Home Sales To Active
The ratio of sales to active listings for new homes in Greater Toronto, for the month of May.
Source: Altus Group, Better Dwelling.
Greater Toronto real estate buyers returned to the new home market on sliding prices. The return was so large, it printed record sales for the month of May. By itself, that would be incredibly positive news. However, that’s hedged by the fact that YTD sales are the second slowest in a decade. May was huge, but still fewer than 2 out of 5 homes for sale are selling.
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To put this into context, my house is worth the same today as it was when I bought in 2015. If you spent less than $10,000/month since 2017, you’re on top if you buy a detached today. Sounds like a deal to me.
$6,000 month on a condo this year as well. Considering a “typical” is a one bedroom, there’s at least a $4k delta per month that could be put into an investment. If you rush into a purchase, you’re almost certain to lose money.
Maybe for new condos only? I bought a resale condo in 2015. It’s over $350k more expensive today.
Gerry, just curious, whereabouts is your house?
Condos are still making money year over year though. If you bought last year, you’re on top.
Except, that’s not true. If you bought last year your financing costs, taxes, insurance, and maintenance fees would have eaten up any gains.
Not saying condos are a bad investment, but you would take a bath if you tried to flip something with a one year timeline these days.
Tommy, seriously?
One thing is if person says most condos are cashflow negative.
But saying that condos today are “rental loss” in CRA definition is a brand new level.
Even with flat price, 99% of condos today are not “rental loss”. The part you are missing is principal debt payment I guess.
Money launderers are parking their monies in Toronto after the FBT in BC. Nothing new.
Toronto has same FBT as part of Fair Housing Plan since 2017.
The only difference in investment decisions is the political environment. Open for Business (Ontario) vs Kill all Rich People (BC)
There’s actually ZERO measures in BC that would prevent investment in condos. People are pretending there’s a slide in demand because everyone is all of a sudden worried their $600,000 condo could be worth $3,000,000 in just a few weeks, so there’s no reason to buy them.
The difference between Toronto and Vancouver is Vancouver is closer to the wealthiest real estate investors. Toronto has enough dumb money to keep a trend flowing for longer when there’s a withdrawal. That said, 2.8% or a drop of $10,000 per month isn’t exactly a reflection of “open for business” driving demand.
Boomer Canadians are hypocrites. They would vote for a racist party, and also harass Muslims and Jew, but they would welcome an organ harvester from a corrupt country to buy their plywood shack for a few mil.
Chester, the only real hypocrite here is you.
You had your entire life to try to make Canada money-laundering free.
But you preferred to do nothing, until someone in media created a hope that actions against money laundering can be just another hit on house prices. At that moment you started talking about it as the most important thing in Canada.
That’s what true hypocrisy is.
No offense, but everyone here clearly sees that you don’t care about money laundering and that you are completely driven by a naive hope of taking advantage of another artificial market shock.
Pathetic.
Money launderers, war criminals and corrupt dictators should be allowed in Canada?
Canada shouldn’t be a haven for global criminals who launder money or murder thousands of children for their organs.
Wow, looks like you hit a nerve. I’ve had my suspicions but now we full well know what camp MM is in, Chinese money laundering troll. Can’t wait for him to pitch how money laundering is good because without it Canada wouldn’t have an economy. Got fentanyl?
Delta pinch is almost here. Condo investors bulk buy to flip to end users after they flip. Assignment gains are only 2.8% now, while resale fell to 6.82%. When the spread is below 5%, there’s absolutely no reason to do it. Everyone gets paid but the actual investor.
OMG naive kid, have you ever heard about leverage that multiplies gains?
You think leverage only applies to gains, and have the audacity to call someone a kid? lol. What’s in the water up there that makes Canadians unable to accept basic math?
Enjoy your 300 sqft condo while you can kiddo. I can already tell you’re a tech bro that’s going to throw a fit when your job disappears and your condo’s value evaporates.
Do you have even a small bit of rationality?
Real estate investing has no sense anywhere in the world if you are not using leverage.
You are a #$% genius if you wanna say “Just because leverage can create losses, not just profit, real estate guys should never use leverage”.
Obviously on your work employer pays you not for process of thinking.
To make it even funnier, the genius like you is actually claiming even banks to be idiots.
Banks are willing to lend money with rate almost below inflation if you have 20% down.
With 35% down they don’t even need to see your income.
It tells you what they think your risks are on duration of any 5 years to find yourself 20-35% under water. I give you a hint, they think risks are statistically insignificant.
What an embarrassment, eh?
Lots of positive news ! Condo prices down 3% but with mortgage rates 50 basis points lower YTD = huge increase in affordability for all.
Sales increases should continue there up trend. Thanks for the awesome update.
Payments came down and prices are only coming down at a rate of $6,000 month. Make sure you put. on some chain maille gloves if you’re going to try and catch that falling knife.