TORONTO, November Twenty-five, 2014 — Greater Toronto, Nov Twenty-five, 2015 Requirement for home ownership remains powerful in the GTA, and dynamics around housing supply are impacting prices and restating the market, claimed the Building Industry and Land Development Association and the Toronto Real estate Board at their first ever joint briefing on the state of the GTA housing market.
Through the 1st Ten months of 2015, there were 124,123 new and resale houses sold in the GTA. An all-time high number of sales were reported through TREB’s MLS ( R ) system. New home sales reported by RealNet Canada Inc. ( an Altus Group Company ) were consistent with the 10-year average, but the mix and sort of new houses being sold as well as their prices have changed. Total new home inventory levels have remained within the standard range at 26,388 houses, but more than 81 percent of those homes are tall condos, according to RealNet Canada Incorporated. ( an Altus Group Company ).
Builder stock of new low-rise houses, including detached, semi-detached and townhomes, was at 4,980 homes at the end of October, a near record low. As of October 31, there were 10,014 low-rise properties available for sale on TREB’s MLS ( R ) system. There were 16,079 new and 12,773 existing low-rise houses available for sale at the end of October 2005. While the provision of low-rise homes has trended lower over the past decade, demand has stayed robust, pointing to more competition between purchasers and really strong price growth.
The average price of a new low-rise home as of October 31, 2015 was $802,376 – more than double the average price in 2005, which was $387,369.
An analogous trend has been noticed for TREB MLS ( R ) transactions. The MLS ( R ) HPI Single-Family Baseline Price increased to $669,400 in October 2015 from $363,100 in October 2005.
The new high-rise market saw an increase in supply in the last 10 years. There were 21,408 new high rise houses available for sale across the GTA at the end of October 2015 compared with 13,006 10 years ago. The average price of a new tall unit was $440,382, up from $288,587 in 2005.
Price expansion for TREB MLS ( R ) transactions was similar over the same time period with the MLS ( R ) HPI Flat Benchmark Price in October at $331,400 compared against $207,800 in October 2005. It’s very important to notice that while we have seen powerful new condominium flat completions and subsequent new lists on TREB’s MLS ( R ) system, these newly listed units have been mostly absorbed. Some distance from seeing a surfeit in supply, the months of inventory trend has declined and expansion in the MLS ( R ) HPI Residence Benchmark Price has accelerated matched against last year.
The size of new condos brought to market has decreased during the last Ten years. The average new high-rise home in October 2015 was 767 square feet, compared to 908 sq. feet in 2005. “As a business we continue to find cutting edge paths to provide a variety of housing selections,” said BILD Chair Steve Deveaux, vice-president of Tribute Communities. “It is increasingly becoming challenging to design, build and sell the homes that many people especially first-time buyers need to and can afford to purchase.
For new houses, single-detached homes saw the largest year-over-year price increase in October. The medium price of a new detached home in the GTA was $962,312.
“To comfortably afford that home with a 20 per cent deposit, the buyer would need a once a year income of $174,854,” Deveaux announced. “With a smaller down payment, the necessary earnings would be even high
Er. According to Statistics Canada, the average total family earnings in the Toronto area in 2013 was $107,200.”
The development industry is building more condominiums than it probably did 10 years ago, but as the GTA keeps on growing by almost 100,000 folks each year, requirement for low-rise homes has not decreased. Deveaux asserted that requirement for detached, semi-detached and townhomes is outpacing supply, which is restricted because of a absence of serviced land chosen for development.
TREB president Mark McLean related the industry is worried about the disconnect between some current executive policy initiatives and homeownership price. TREB cites the Ontario government’s plan to allow municipalities to charge their own borough land transfer tax as the most recent example.
“House buyers in the GTA currently benefit from a diversity of new and existing home options that are cost-effective at different revenue levels,” McLean said. “Sadly, the provincial central authority appears settled on hampering home possession cost. Studies have shown that municipal land transfer taxes will have a negative impact across Ontario, not just from an affordability viewpoint, but also by undermining our economy and costing thousands of jobs.”
Central authority costs and taxes amount to a median of one-fifth the price of a new home in the GTA, according to a BILD-commissioned study in 2013. This drives up the price of new houses and later trickles down to the resale market.
The associations stated that it is important for executives to educate residents about the effects state policy changes will have on the state of the housing market in the GTA.
“This industry is crucial to the business growth and wealth of our cities and it’s important for GTA residents to appreciate what drives and impacts it,” Deveaux expounded.