Greater Toronto real estate can’t catch a break these days. The latest data from developer intelligence firm Altus Group and the regional developer group BILD GTA, shows Toronto new home prices slipped lower in May. Weak demand at this price level has pushed sales this year to the weakest level on record. It’s not for a lack of inventory, which has climbed to the highest level for the month in nearly a decade.
Greater Toronto New Home Prices Continue To Fall
Greater Toronto new home prices slipped further last month. The benchmark, or typical, price of a single-family home fell to $1.61 million in May, down 7% from a year before. Condos did a little better at a benchmark price of $1.04 million, 5% lower over the same period. It’s still not exactly affordable, but both segments have dropped nearly 30% since hitting the peak a few years prior.
Greater Toronto New Home Benchmark Price
The price of a benchmark new home across Greater Toronto.
Source: Altus Group.
Greater Toronto New Home Sales Have Never Been Worse
Demand for new homes across Greater Toronto at this price has never been weaker. New home sales fell 71% to just 936 in May, bringing year-to-date (YTD) sales 46% lower, with just 4,686 units sold this year. According to BILD GTA, YTD sales have fallen to the lowest level on record—30% lower than the previous low set in 2009.
Greater Toronto New Homes Sales On Track For Weakest Year Ever
Greater Toronto new home sales for the month and year to date for May.
Source: Altus Group.
Breaking down the inventory, weakness was consistent across the region. Sales of single-family homes fell 65% from last year, while condos dropped 75% over the period.
Greater Toronto New Home Inventory Climbs To Multi-Year High
By itself, sales don’t tell the whole picture—low inventory could restrict the number of sales. That’s not the case across Greater Toronto, where inventory has reached a multi-year high. Total new home inventory climbed 33% over the past year to 20,427 units as of May. It’s the most inventory reported in May going back to 2016, nearly a decade ago and before the city’s prices made its rapid climb.
Considering the population growth rate, it’s surprising to see such soft demand for new homes. Though it aligns with the rising apartment vacancies, now higher than pre-pandemic levels. Either Greater Toronto’s population estimates have been generous, or young adults have reached the limit on how much they can pay.
“…or young adults have reached the limit…”
With the current state of housing and affordability, I think everybody’s to the limit. Are we all just fhqwhgads?
https://youtu.be/votBDwhTu1E?si=9JYt0ZTm0Fm_RfJ1
Are we at the point where we are allowed to say it’s the government’s fault?
In another six months, if present trends continue, there will be no new condo buildings to start as each pre-sale must sell 70% of units to qualify for financing.
This will result in GTA construction industry layoffs of tens of thousands in the next year. The ensuing depression will make the recession of 1990-1995 look like a picnic!
That is why the Doug Ford government wants to call an early election but Ford like David Peterson in 1990 will have waited too long. The recession has already started!
It definitely seems that many have reached the point where they can pay no more. It’s impossible to save up to purchase a home while also paying exuberant rent prices.
A couple need to make over a quarter million dollars a year to make the cut, while also having 100s of thousands already saved. What jobs in the city allow for someone in their early 30s to have amassed such wealth?
Illegal stuff.
Great blog here guys..
The governance systems have empowered corporations (gangs) while everyone does not realize what is happening.
This is a day of harvest for folly sown for decades – reckoning. For a better future need to dig into understanding what are the real seeds to sow for a better future with time left.
Powerful turn-arounds however, take years to create. Parents of today have to consider their kids in the next 15/20 years and make the decisions for them.