Toronto New Home Sales Doubled, Even With COVID-19 Pandemic Warnings

Greater Toronto real estate buyers rushed into the market, even amongst pandemic warnings. Altus Group data shows new home sales more than doubled in February. The impact on prices was mixed, as new single-family homes continued to fall. Condo apartment prices rallied to a new all-time high. The gap between the two narrowed to the smallest level since 2014.

In Greater Toronto, Only Condo Prices Are Rising

The typical price of a new home is still heading in two different directions. The new condo apartment benchmark reached $961,268 in February, up 21.3% from a year before. New single-family homes reached $1,097,987, down 2.2% from a year before. The condo apartment benchmark is at a new all-time high, while single-family homes remain over 15% below peak values reached in 2017. This is the closest both benchmarks have been in over half a decade.

Greater Toronto New Home Sales More Than Doubled

Greater Toronto new home sales had one of the biggest Februaries ever. There were 4,665 new homes sold in February, up 211% from the year before. Breaking it down, condo apartments represent 2,418 of those sales, up 197% from a year before. Single-family homes represented the remaining 2,247 homes, the segment is up 228% from a year before. Last year was an unusually slow February, which is why the growth numbers look so large. It shouldn’t be dismissed though – this was the biggest February for Greater Toronto since 2014.

Greater Toronto New Home Sales

Total October new home sales in Greater Toronto.

Source: Altus Group, Better Dwelling.

York Region Sees More New Home Sales Than Toronto

Most of new home sales growth wasn’t in the City of Toronto, although it did show big growth. The City of Toronto represented 1,310 of the sales, up 121% from last year. The biggest growth was in York Region, with 1,336 new home sales, up 667% from last year. York region is now a slightly bigger market than the City.

Greater Toronto New Home Sales

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

Source: Altus Group, Better Dwelling.

Highest February Inventory In Over Half A Decade

The big difference between this climb and the one seen over the past few years is inventory. Total inventory in Greater Toronto reached 17,199 units in February, up 4% from a year before. Condo apartments represent 12,909 of those units, an increase of 15% from last year. Single-family homes represented the other 4,290 units, down 18% from last year. This is the highest level of February inventory, in at least half a decade – but likely longer.

It Was A Tighter Market Than Last Year

Sales increased faster than inventory, providing some pressure on prices to move higher. The sales to active listings ratio (SALR) reached 27.12% in February, up from just 9.09% last year. Generally, when the ratio rises above 20%, it’s a seller’s market and prices increase. When it’s below 12%, it’s a buyer’s market, and prices decrease. Between 12% and 20%, and the market is correctly priced for demand.

Greater Toronto New Home Sales To Active

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

Source: Altus Group, Better Dwelling.

Greater Toronto new home sales were huge going into the COVID-19 pandemic. The impact on prices was a little varied though, with single-family prices still falling after two years. Condo apartments on the other hand increased nearly a quarter from a year ago. Prices for both segments are now the closest they’ve been since 2014. Don’t expect a lot of changes to prices during Ontario’s shut down. However, when markets reopen, it’s most likely going to be a very different market.

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  • Reply
    Marc 4 years ago

    It’s never pretty when frozen markets are unfrozen.

  • Reply
    Trader Jim 4 years ago

    Over 1.55 million unemployed claims in ten days. Maclean’s started a layoff tracker for anyone into that stuff.

    • Reply
      Steve 4 years ago

      Hi Jim: I just checked out the Maclean’s layoff tracker, and It’s scary stuff. It’s the proverbial stone thrown in the pond – lots of ripple effects throughout the entire country. Yet, some people don’t seem to get how serious this is – oddly enough there are still some real estate agents advertising on the radio that this is a great time to buy because of low interest rates, and no competitive bidding. This entire country is one step away from a depression. Our entire GDP has been driven by HELOC over the past few years instead of wage growth. It’s a false economy that has been similar to a ponzi scheme.

    • Reply
      Brad 4 years ago

      Note that a very large percentage of these will be temporary layoffs until the peak of COVID in the country is over, this isn’t a regular slowdown by any means.

  • Reply
    Michael 4 years ago

    I don’t think the numbers going forward will look like that. The WHO didn’t declare a pandemic until March 11th.

  • Reply
    Steve 4 years ago

    There still seems to be a huge disconnect between house prices, and average income.
    We all know the impact that foreign buyers have had on the housing market, especially in Vancouver, Toronto, and to a lesser degree Montreal. The amount of properties that they purchased may have been minimal but their impact on pricing was massive. We all know how real estate agents love to use comparables to price the housing market. At the end of the day, people who were trying to launder/hide money didn’t care what they paid. What’s to say that this won’t happen in reverse? When before they were saying “get me in at any price”, they may now be saying “get me out at any price”. I’m old enough to have been in the housing market in 1989/90, and to have been a floor trader on the old TSE in 1987, as well as a trader during the dot com bubble & US housing crisis after we went to electronic trading. I have seen a crash, or two in my day. People have started to treat their homes as an investment, instead of a place to raise their family. A generation who have no knowledge of interest rates above 3%, and feel that housing prices never go down are in for a rude surprise. All bubbles burst – it may take a long time, but they do. I hold the mortgage on all three of my children’s property, and they are the lucky ones. Firstly, because I won’t foreclose, and secondly because I made them save for the down payment, and lent to them accordingly. It is absolute financial craziness to be paying more than 3-4 times your income for housing. In simple terms, a large majority of our population have borrowed an amount of money that they cannot repay if interest rates go up, or if their is financial crisis.

  • Reply
    DB 4 years ago

    I agree. It’s not who would buy in a climate like the one going on today; It’s who would not sell if you had to sell today.. I think allot of buyers like my GF were legally bound to continue with the purchase or lose more money and allot are wondering if they made the right choice. The sellers are quite happy I’m sure to have unloaded their place when they did.

    • Reply
      M.Bury 4 years ago

      That’s a good takeaway DB, let’s build on that…

      Many pre-construction purchases in 2016, 2017 and 2018 are supposed to close this Spring. Most of these buyers were thinking they could wait to sell their homes at the last minute and come out way ahead. Remember, this was a time when buying your new property first then selling the old property made sense because the prices were escalating on a weekly basis.

      Could be a very interesting Spring market…

  • Reply
    GD 4 years ago

    This will not be a V shape recovery, the amount of reorganization when the dust settles will be staggering and if you think housing will be immuned think again.

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