Toronto

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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8 Comments

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  • Bill 2 months ago

    And the Gov approved debt binge continues unabated. Meanwhile in other new CMHC is sending out letters to banks/mortgage companies telling them to stop predatory lending. I really do believe this is where it finally ends.

  • Fight Back 1 month ago

    I came to the realization during this pandamic that our government is the one creating and propping up this real estate bubble.

    Guys time to create a movement against this massive wealth theft from the young to the old. They are killing Canada’s future.

    • Ghl 1 month ago

      Hey I know it must be painful to be the only woke person in a sleeping room. But face it, young Canadians are not very bright and they have no idea the government is forcing them to pay for boomer free health care and real estate wealth.

      Im just glade Im not in your shoes trying to tell idiots the obvious.

      • alvi 1 month ago

        Government been” forcing” youngs canadians to pay for health care for older canadians since 1963, CPP in 1966 , public education and other programs earlier than that,all of which prop up the real estate sector and every other sector, especially the vast bureaucracy that selflessly delivers these programs

  • Old Nick 1 month ago

    House of Cards!

  • neo 1 month ago

    I believe Greenspan referred this this phenomenon in the US just before 2009 as “irrational exuberance”. That is Canada in 2020….

  • DownToFinance 1 month ago

    Why is the author posting stats from Feb saying the pandemic has no effect when the pandemic was not a concern in Feb?

    Yes the market was heating up before the pandemic but that was before the Rona recession and before the government decided to bailout every overextended speculator and their grandma.

    • Tony 1 month ago

      Yes these are Feb stats pre-pandemic. Lets see what happens in September

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