Greater Toronto new home prices slipped, as inventory helped to ease pricing pressure. BILD GTA, a local developer group, said sales climbed in April, especially in the condo segment. Higher inventory helped to attract more buyers, but also contributed to lower prices. New home prices fell up to $48,000 in just one month. A hefty discount over 30 days, especially considering it climbed at that rate just a few weeks before.
Greater Toronto New Home Prices Fell Up To $48,000
Toronto’s new single-family home prices made a sharp drop last month. The benchmark fell to $1,395,190 in April, down 3.35% ($48,448) from a month before. Prices are still 24.8% ($277,249) higher than the same month last year though. New home prices are still up significantly, even after the drop. However, that drop is something to keep an eye on, considering it would only take 6 months of those to wipe all gains.
New condo apartments also saw price declines, but it wasn’t nearly as big as the single-family drop. The benchmark price of a new condo reached $1,058,432 in April, down 0.55% ($5,885) from a month before. Prices are still up 7.5% ($73,844) though. Still plenty of profits are retained, but prices are changing quickly for some reason.
Condo Apartment Sales Are Printing Multi-Year Highs For Growth
The insights for new home sales are kind of wonky, due to the pandemic’s impact on restrictions last year. There were 4,639 new home sales in April, up 467.81% from a year before. Like I said, that isn’t particularly useful since last April was a lockdown. Real estate hadn’t yet had rules on how to operate safely, putting a sudden halt on sales. Compared to 2019 though, new home sales are up 20.93%. It’s still a large increase, just not an absurd one due to base effect.
Greater Toronto New Home SalesTotal April new home sales in Greater Toronto. Source: BILD GTA; Altus Group; Better Dwelling.
Breaking that down, single-family new home sales grew — just not to typical levels. There were 1,020 new single-family homes sold in April, up 230.10% from a year before. Compared to 2019, this number was 30.10% higher. Even though it was higher than the past two years, the number was 26% below the 10-year average for the month. The past couple of years have been slow for the segment.
Single-family new home sales were unusually slow, but condo apartments became more coveted. There were 3,619 new condos sold in April, up 612.40% from the year before. Aside from the absurd base effect, new condo sales were 18.58% higher than 2019 levels. It was the biggest month for April condo sales since 2000, and the number was 69% higher than the 10-year average. A lot of interest in condo apartments, it would appear.
Greater Toronto New Home SalesTotal new home sales in Greater Toronto for April, by region. Source: BILD GTA; Altus Group; Better Dwelling.
The Market Is Still Tight, But More Inventory Helped Ease Pressures
The price reduction is most likely due to a bump in inventory, helping to ease some pressure. The sales to active listings ratio (SALR) fell to 36.9% in April, down from 43.6% a month before. April 2020 had a big data skew due to the sales halt, printing just a 5% SALR. Inventory is still very tight, and this is the highest April ratio since 2017. However, the month-over-month decline helps to explain why prices slipped. Pandemic buyers can’t remember last year.
Greater Toronto New Home Sales To ActiveThe ratio of sales to active listings for new homes in Greater Toronto, for the month of April. Source: BILD GTA; Altus Group; Better Dwelling.
The base effect makes it difficult to pull many insights, but it’s safe to say market activity is still very brisk. Sales are up, even when compared to 2019 levels. Inventory is also rising though, helping to push prices lower. While prices are still up significantly from last year, the monthly drop is hard to ignore. Only 6 months like that would wipe out a year of massive gains for single-family homes.
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