One year since the announcement that 2015 was a record-setting year for new home sales in the GTA, the Building Industry and Land Development Association (BILD) has announced that records were broken again in 2016. Most notably, the staggering 29,186 new high-rise units sold across the GTA in 2016 represents the largest per-year sales number ever recorded in the region, a 30% increase over 2015's figures. This number accounts for 62% of the 47,161 new homes sold in the GTA in 2016, while the remaining 17,975 low-rise units accounted for 38% of sales. Another notable instance is the more than doubling of home sales in Durham over 2015's figures.
By the close of December, the number of available new homes across the GTA fell to a 10-year low of 13,670, which is less than 50% of the 30,400 homes available a decade earlier. A 10-year low was also recorded in high-rise inventory, at 11,792 units. During the same period, low-rise supply sat at 1,878 homes, including 742 single-family detached homes. In contrast, 12,871 high-rise units and 17,529 low-rise units (including 11,602 single-family detached homes) were available a decade ago.
Rising home prices are being partially attributed to the lack of supply, with prices for all types of new homes in the GTA breaking records in 2016. The average price of available new detached, semi-detached houses, and townhomes rose to $995,116 in December 2016, while the GTA average price for single-family detached homes reached $1,264,604. New detached home prices in particular rose by over $273,000 in 2016.
"The decline in low-rise sales in 2016 was due to the lack of product available to purchase, not softer demand," said Patricia Arsenault, Executive Vice President of Research Consulting Services at Altus Group. "The fact that new product is being quickly absorbed, despite rising prices, shows there is continued buyer interest in purchasing new ground-oriented homes in the GTA."
It should come as no surprise that new high-rise home prices hit a record high in 2016, with average condo prices in the region increasing to $507,128, a sharp increase from the $321,353 recorded in December 2006. GTA condo sizes reached a new average of 826 ft² in December 2016, while the average price per square foot (ppsf) increased to $614—increasing from the $584 ppsf and 775 ft² condo sizes recorded at the end of 2015.
"We have a shortage of housing supply in the GTA that is approaching crisis levels," said BILD President and CEO Bryan Tuckey. "Housing is selling as quickly as the industry can bring it to market and the lack of developable land that is serviced with infrastructure, excessive red tape, out-of-date zoning and NIMBYism are hindering our ability to bring more to the market."