Greater Toronto real estate is barely recognizable after the sudden market shift. Altus Group data shows new home sales plummeted in June, with no single-family homes sold in the City. Not one. At the same time, inventory made a small climb but a big improvement with falling sales.
Greater Toronto New Home Sales Are Plummeting
Greater Toronto new construction demand has plummeted over the past few months. Only 175 new single-family homes were sold in June, down 85% from last year. Condo apartments fell to 1,519 sales, down 44% over the same period. Higher rates have throttled demand, especially amongst investors.
New home sales in the City of Toronto were hit hardest. Not one single-family home sold in the City, down from 13 last year. In contrast, the February madness saw 45 single-family units bought in the City. Condos did a little better with 717 units sold, down 16% from last year.
Greater Toronto New Home Inventory Is Rising, But Falling Demand Released More Pressure
Greater Toronto new home inventory is rising considerably. There were 11,639 units for sale in June, up 1.6% from last year. It’s not a huge increase, but plummeting home sales reduce competition (and stress) on supply.
Pre-construction inventory has climbed sharply from record lows just a few months ago. There were 6,256 pre-construction units for sale in June, a 46.2% increase from the December 2021 low. It’s a recovery and close to 2018 levels. Still a long way to hit 2019 levels, but it’s getting there.
The big story, and reason for plummeting demand, is the sharp rise in rates. Having a market flooded with practically free money boosted demand, especially amongst investors. Rising rates makes it more difficult to make a profit, and we know investors have been a major segment of demand. As they pull back more people will be playing with their own money. That generally means a lot less robust growth, since credit grew a lot easier than income will.