The price of a new low-rise home in the GTA saw its first monthly decline in 19 months in August, according to a report released today by the Building Industry and Land Development Association (BILD) and market research firm RealNet Canada.
RealNet’s new low-rise index price declined to $800,099 in August, down from a record high of $806,395 set in July. Low-rise prices have been steadily on the rise for months and this decline marks a rare narrowing of the gap between new high-rise and low-rise home prices.
In a press release, BILD President Bryan Tuckey attributed the price drop to a seasonal slowdown and pointed out that low-rise prices are still 16 per cent higher when compared to August 2014 prices.
The price decline also came as new low-rise inventory reached a new low, another consistent theme throughout 2015 and, indeed, much of the last five years. There were 4,298 new detached, semi-detached and townhomes available in the GTA in August, down from 4,550 homes available in July, according to the report.
Meanwhile, the supply of new high-rise homes in the GTA also saw a dip in August with available inventory declining to 18,759 high-rise homes from 20,133 in July. But even with the decline in supply, RealNet measured a slight increase in the new high-rise index price in August. The index price rose to $450,837 in August, over $446,398 in July.
Tuckey said that declining low-rise and high-rise supply impacted sales numbers for the month.
“Constrained supply of serviced, developable land has significantly limited inventory of new homes, and you can’t sell what you don’t have,” he said.
When compared to sales figures from August 2014, low-rise sales declined 25 per cent while high-rise sales were down 24 per cent.
“There were a number of new project launches in the first half of 2015, but most of the homes were purchased shortly after they came on the market,” said Tuckey.
He also pointed out that typically fewer new projects are launched in August.
The report noted that the sales decrease in August was uniform across all GTA regions except Peel, which saw a modest increase over the previous year.
Despite the sales slowdown in August, year-to-date new home sales in the GTA remain strong. There have been 27,416 homes sold in the GTA between January and August, 13 per cent above the 10-year average for the period.
According to BuzzBuzzHome’s Market Snapshot tool there are 20,024 condo units and 2,222 houses and townhouses available for sale in Toronto-proper. The median list price of a new condo is $413,900 while the list price for houses and townhouses is $585,990.