Toronto New Home Prices Crash More Than 10% Over 30 Days

Did the bottom just fall out for the Greater Toronto real estate market? BILD GTA and Altus Group data shows new home sales across the region in June were double last year’s volume, but remain the second-weakest for the month on record. That almost seems like an insignificant detail in contrast to single-family homes plunging over 10% in just 30 days, shaving over 30% off the top. 

New home prices across Greater Toronto just kicked off one of their fastest spirals ever. The benchmark price of a single-family home fell 10.7% (-$152.1k) to $1,275,500 in June, 15.5% (-$234.6k) lower than last year. The price of a typical new home in this segment is now 34.0% (-$658.5k) lower than the record high it printed back in 2022. It’s officially the sharpest correction in history—though we’ll come back to that quaint little detail in a moment. 

New condo prices are moving the other way. The price of a benchmark condo climbed 0.9% (+$9.1k) to $1,038,600 in June, 1.0% (+$10.1k) higher than last year but 12.8% (-$153.1k) lower than the July 2022 record high. That’s a substantial correction, but given that new condo demand has virtually collapsed, this doesn’t quite sound all that reliable, does it? 

This has to do with the industry’s measurements. Unlike the CREA benchmark prices, the Altus index doesn’t use sold data. It relies on the list price, and doesn’t make qualitative (e.g., location) or quantitative (e.g., size) adjustments. As a result, a big group like single-family units is more susceptible to shifting lower if there are fewer detached units, and more townhomes. Similarly, condo prices won’t reflect the massive concessions—or discounts when sold overseas. Prices are moving lower, but this is more than likely a problem with how the industry actually measures them.

New home sales more than doubled—but that wasn’t saying much near these historic lows. Greater Toronto’s new home builders sold 1,175 new homes in June, up 130.4% (+665 units) since last year. That sounds impressive until you realize last month’s volume was 52.1% lower than the 10-year average. While it’s higher than last year, that was a multi-decade record low. Last month remains one of the worst on record for the Greater Toronto region. 

New home investment had a sharp pullback, but it remains relatively lofty—especially given demand. There were 18,888 units for sale in June, 15.1% lower than last year. A nice rounding on the last three digits that we seem to recall seeing in Vancouver a few years ago—until revised and finalized data didn’t quite make it the sign of luck reported. But for now, that’s the number—roughly double 2020’s lows, and a volume similar to June 2019. 

The big difference between last month’s data and June 2019 is the composition shift. There were 12,579 new condos for sale last month, down 24.7% from last year. The crowded condo resale market is weakening demand, and builders have responded by pausing new projects this year. The pivot has led to a surge in single-family new homes for sale, which climbed 13.5% from last year to 6,309 units for sale. That volume has more than tripled in the past three years, with last month being the most single-family homes for sale since at least 2018. The pivot from slinging condos to single-family homes is very real. 

New home sales picked up, but even doubling last year’s volume makes it one of the weakest reports for June on record. This highlights how much demand has fallen off in the region, even more than the price plunge. 

Cratering detached prices sounds interesting, but it does seem more like a modelling issue than reality. If the market really believed new home prices experienced such a significant drop, it would create a wave of issues for appraisals and financing. As it is, that’s already become a serious concern for Canada’s bank regulator—privately, at least.