Housing supply crisis continues to shatter market records
In March, the GTA’s housing supply challenges resulted in record smashing prices, continued unprecedented inventory scarcity, and a never seen before level of new condo apartments sales, the Building Industry and Land Development Association (BILD) announced last week.
The number of new homes available to buyers continued to drop to unprecedented levels of scarcity. Across the entire GTA there were only 10,153 homes available to buyers in builder inventories, according to Altus Group, BILD’s official source for new home market intelligence.
The available builder inventory has dropped by half in just one year. In March 2016, there were 21,006 homes available to buyers.
“The ongoing decline in new housing inventory is a direct reflection of how difficult it is for the industry to bring product to the market,” said BILD president and CEO Bryan Tuckey. “The hurdles builders face keeps getting higher.
“There are ongoing major challenges with a lack of serviced and permit ready developable land and out-of-date zoning bylaws. The complexity and time it takes to get the vast numbers of approvals and permits necessary to build have increased dramatically in recent years,” he added.
The available supply of new single-family lowrise homes, which includes detached, semi-detached and townhomes, has taken a nosedive since 2007. There were only 932 new lowrise homes available to buyers in builder inventories at the end of March, whereas a decade ago there were 17,854 available.
The scarcity is especially pronounced in the number of single-family detached homes, which has seen supply drop by 98 per cent in a decade. Last month there were 233 detached homes available for purchase compared to 11,802 in March 2007.
“The inventory numbers are telling us very clearly that not enough new housing, and not the right mix of housing, is being built to keep up with consumer demand or our housing needs,” Tuckey said. “The industry is following the province’s intensification policy and building and selling far fewer lowrise homes than a decade ago, but demand for single-family homes has not dropped.”
The average price for available new lowrise homes was $1,124,600 in March, up more than $40,000 from February and an increase of 32.4 per cent from a year ago. The price for available new detached homes hit $1,783,417 in March, an increase of $716,711 in just one year.
Prices of available condo apartments in highrise and midrise buildings and stacked townhomes were up 14 per cent from a year ago. The average price of units in March was $532,792, with the average price per square foot at $666, and the average unit size 800 square feet.
Last month was the biggest month for sales of new condo apartments in the GTA with 4,500 units sold. Until last month, May 2016 held the record for the most condo apartments sales with 3,820 suites sold.
“The record number of condominium apartment sales in March was boosted by recent launches of product in prime locations – more than half of March sales were in projects opened in February or March,” said Patricia Arsenault, Altus Group’s executive vice president of research consulting services. “Demand continues to be fuelled by end-user buyers who are shifting their expectations towards more attainable product, as well as by investors whose presence will help ensure a steady stream of new rental housing supply in the years to come”
Nearly 80 per cent of the new homes that were purchased in the GTA in March were condo apartments in highrise and midrise buildings and stacked townhomes. The skyrocketing number of condo apartment sales was a stark contrast to sales for new single-family ground-oriented homes. In March, there were only 1,175 lowrise homes sold in the GTA, which is down 45 per cent from a year ago and 24 per cent off the 10 year average.