Toronto

Only 5% of Greater Toronto’s New Homes Sold Last Month

Greater Toronto new home sales finally got the pandemic message last month. Altus Group data shows sales made a dramatic drop in April. The segment had bucked the slowing market in March, but is now finally responding. The result has been a mixed movement for prices.

New Single-Family Prices Fall, While Condo Apartments Rise

The Altus benchmark price for new homes increased, but with some confusing metrics. The benchmark for a new single-family unit reached $1,117,955 in April, down 0.2% from a month before. The condo apartment benchmark reached $984,369, up a massive 29.8% from last year. Detached prices are still about 10% lower than peak, while condo apartments are at a new high.

The rate of growth is deceivingly high for condo apartments, due to the comparison period. In March, condo apartments printed a 12-month price increase of 25.9%. The jump to 29.8% sounds huge… until you realize prices increased only $1,236, or 0.12%, from the month before. Prices increased less than a mortgage payment, but 12-month growth increased 4 points. To contrast, single-family homes increased $2,086, or 0.19%, from a month before. The 12-month rate of growth went from -0.1% in March, to -0.2% in April. Much less comparison period distortion, and since the monthly increase was less than seasonal, a bigger annual decline.

The Worst April For Greater Toronto New Home Sales Since 2000

Greater Toronto new home sales cooled to the worst April on record. Total new home sales were 771 units in April, down 80% from last year, and 78% below the 10-year average. Breaking it down, single-family units represented 301 of those sales, down 62% from last year, and 79% below the 10-year average. Condo apartments represented 470 units, down 85% from April, and 78% below the 10-year average. Sales of condo apartments were falling much faster than detached homes.

Greater Toronto New Home Sales

Total April new home sales in Greater Toronto.

Source: Altus Group, Better Dwelling.

City of Toronto Sales Fall A Little Slower Than Rest of The GTA

The City of Toronto saw a large drop in new home sales. The City represented 328 of the new home sales in April, down 69.68% from last year. Single-family sales were 8 of those sales, a drop of 84.61% from last year. Condo apartments were 320 of the sales, down 68.93% from last year. Big drop, but lower than the drop seen  across the region in general.

Greater Toronto New Home Inventory Makes A Sharp Drop

Greater Toronto new home inventory took a dip last month. There were 13,851 units available in April, down 0.58% from the previous month. This represents a decline of 24.25% compared to the same month last year. A sharp decline in inventory, but this is primarily due to launch delays. Who launches a project in the middle of a pandemic?

Greater Toronto New Home Sales

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

Source: Altus Group, Better Dwelling.

Greater Toronto New Homes Could See Prices Fall

Greater Toronto did see sales fall much faster than inventory though. The sales to active listings ratio (SALR) fell to just 5.57% in April, down from 26.77% a month before. Last April, it was sitting at 21.07%. The market is considered a buyer’s market below 12%, when prices generally drop. It’s considered a seller’s market above 20%, when prices generally rise. Between 12 and 20%, and the market is considered balance. According to the indicator, prices may be a little soft if it maintains this level over the next few months.

Greater Toronto New Home Sales To Active

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

Source: Altus Group, Better Dwelling.

Greater Toronto new home sales look bad, but the market is mostly frozen. Don’t expect typical movements based on historic metrics just yet. Although the longer the market stays like this, more long-term damage could be felt. Expect delays for new inventory, and even some cancelled projects.

Like this post? Like us on Facebook for the next one in your feed.

5 Comments

COMMENT POLICY:
We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • Reply
    K Money 1 month ago

    Premiums make no sense for new construction in Toronto. You can get built units today that have been barely used for cheaper.

  • Reply
    James 1 month ago

    The market was never going to push like it did 3 years ago.

    People can keep dreaming. I’d like to know how many people are going to actually get to make the 20% payment, without the unit being cancelled first.

  • Reply
    zalzon 1 month ago

    Half the economy was geared towards pushing overpriced real estate and house flipping with the consequences of default recoursed to the taxpayer.

    Moves will be afoot to keep the RE pyramid scheme going by hook or by crook or there is going to be an implosion for those whos jobs are reliant on the above.

    • Reply
      michael 1 month ago

      > or there is going to be an implosion for those whos jobs are reliant on the above.

      E.g. All politicians.

  • Reply
    Kolf 1 month ago

    Humans needs to understand one thing, out in this world with so many unknowns we can only depend on our own logic to sort through and understand this world.

    Example: should I treat others as I would like to be treated.
    We have two choices, treat everyone nicely or run the risk of some entity exacting the same wrong on you. Or just treat and hurt everyone even given the chance. Well we all know the first choice you will be forever controlled. But for the opposite we can use logic. For example, if that rule applies fairly to everyone than it will work, meaning if someone wronged you with X, that person will also get X in return. That would be a fair system. However all my life I have never seen someone who have wronged me be punished. The only punishment I can depend on is through my own hands. This can only mean two things. One, the entity which controls these things hate you and you will never be treated fairly, i.e people who wronged you get away with no punishment, but when you harm others the same thing will happen to you. This shows the ill intent of the entity towards you and there is really no point of being good to anyone because something with such power that wants to harm you is just doing so to be mean. You should use every opportunity to anger it and oppose it. Therefore enacting the opposite of what it wants.
    Second is when there is no entity that controls these things, hence since my life have been so unfair it would be better to spread the pain with others so they get a dose of pain that they caused.

    What does all this have to do with real estate? When, everyone who speculated on housing to make it unaffordable for people deserves to be hurt and wiped out this year. Why? Review the above logic, there is clearly no entity to protect fairness hence those who have been wronged by the housing bubble should not feel any pity for those spectators who screwed them out of their dignity.

    This is my motto, be a mirror reflect whatever wrong that have been casted upon you back into the world.

Leave a Reply

Your email address will not be published. Required fields are marked *