Greater Toronto Area (GTA) new home sales picked up in September, but the recovery remains shaky. BILD and Altus Group data shows sales rose 63.9% from last year, but they remain historically weak. The bigger story is prices—nearly a third of the single-family correction has occurred in the past 4 months. New condo prices have held up better, but buyers are balking with sales hitting a record low for the segment.
Toronto New Single-Family Homes Fell $180k In The Past 4 Months
The Altus Group benchmark price of single-family and condo apartment homes across Greater Toronto.
Source: Altus Group; BILD GTA.
New home prices continued to slide, led by single-family homes. The segment’s benchmark slipped 0.2% (-$2.1k) to $1.25 million in September, down 13.3% (-$190.7k) from last year. September’s decline was modest, but the bigger story is the sudden return of plunging prices.
Prices have effectively fallen off a cliff since May, dropping 12.7% (-$180.8k) in just four months. That accounts for nearly 95% of the decline over the past year. The benchmark is now 35.5% (-$687.1k) below its July 2022 record high. The percentage decline over the past four months alone is more than a third of the total decline from the peak, leaving prices where they were almost 6 years ago.
New condo prices have held up much better. The segment’s benchmark fell 1.0% (-$10.3k) to $1.03 million in September, just 0.2% (-$1.7k) below last year. Prices are now 17.6% (-$220.9k) below the March 2022 record high—roughly half the percentage decline seen in single-family homes. That relative strength has narrowed the price gap between the two segments to just $215.2k. Whether that means single-family homes are now relatively weak or new condos are set to correct further is anyone’s guess. However, a breakdown of home sales suggests demand for new condos at these prices is almost non-existent.
New Home Sales Rise, But New Condo Sales Hit A September Low
Greater Toronto new home sales in September.
Source: Altus Group; BildGTA; Better Dwelling.
New home sales jumped, but the above chart should temper expectations. There were 949 units sold in September, up 63.9% from last year. Single-family homes accounted for 820 sales, the strongest September since 2021. Condos weren’t so lucky: just 129 units sold, down 40.3% from last year and the weakest September on record.
The increase is welcome, but a base effect makes it sound more impressive than reality. Despite the jump, total sales remained 52% below the 10-year September average. Sales of single-family homes have recovered, while condo demand continues to find new lows.
New Home Inventory Falls, But Remains Elevated
New home inventory fell but remains lofty by the region’s historical standards. There were 19,957 new homes for sale in September, down 8.2% from last year. Despite falling below the past two years, inventory remains at its third-highest September level since 2015. New home inventory might be lighter, but relative to sales, this remains a weak demand balance.
Toronto’s new home sales improved, but the numbers are less impressive when broken down. Single-family sales picked up alongside steep declines in prices. As for condos, prices are firmer, but with sales at record lows, buyers are balking at those prices. Last month’s numbers are even less impressive when one considers it’s the result of billions in bailout programs. From developer bailouts to tax incentives, that’s a lot of public support for a market struggling to find buyers.
If the entire price jump was just speculators, the market’s not returning unless speculators do or prices fall back to pre-speculation levels that actual people can buy. Not hard to understand.
Honest truth? I was ready to take a look at some new place last month just to get out of my lease. Seeing prices drop that much is actually kind of nice if you can afford the down payment, but looking at those condo sales numbers makes me feel bad for first time buyers who thought they had a shot. The market feels so weird right now where single family homes are crashing and condos aren’t moving because nobody has money left.
The article says sales are up but it does not feel like it when you look at actual inventory. We have tons of new homes sitting on lots with nowhere for buyers to go because the market is just too F-IN EXPENSIVE. I think people are scared to make an offer after seeing detached home prices crater.
Still too expensive.
It feels like the government is throwing too much cash at developers to keep these numbers from falling even harder. With all those bailouts and tax breaks, I wonder if prices are staying up artificially rather than finding a real balance for regular families. It looks like we just had a massive reset where values went back almost six years ago in just a few months.
High condo fees , that are increasing much faster than the general inflation rate are beginning to kill the condo market. Buyers are avoiding high fee condos which are rapidly dropping in value. The average buyer is more concerned about the actual monthly fees. The other shoe is the rapid drops in value due to high fees. This has not percolated to the buying public but will be noticed in the near future. This will make high fee condos pretty much unsellable.