There’s no time like the present, as lowrise prices are moderating
Lowrise prices are moderating, and homebuilders are offering purchase incentives
The prospect of owning a lowrise home in the GTA has traditionally been a cost prohibitive one for most buyers in the market. But the once yawning price gap between lowrise homes and condominiums has started to come a bit more into balance as of late. This means it could be a good time for some to consider the purchase of a lowrise home; if not a detached house, then perhaps the relatively more affordable option of a townhouse.
The Canada Mortgage and Housing Corporation is forecasting that the GTA’s lowrise housing market is headed for a slight downturn this year, largely owing to a lack of land for the development of single-family and townhouses. That said, suburban regions such as Peel, Durham and York will account for higher concentrations of the GTA’s single-family detached sales and listings moving forward, and CMHC says that should slow price appreciation in the lowrise segment.
Condos continue to be the more affordable alternative to new single-family homes. But the difference in pricing between new single-family homes and new condos has narrowed significantly over the past two years, according to a new report from Altus Group.
The benchmark price of a singlefamily home in the GTA finished 2018 at $1.14 million, about 13 per cent below the peak it reached in July 2017, Altus Group notes. Meanwhile, the benchmark asking price for a new Toronto condo hit $796,815 at the end of 2018, an increase of 11 per cent from the previous year and a new all-time high for condos.
There is still a limited selection of affordable lowrise options out there for most buyers in the market, with only one in five new single-family homes available to purchase at the end of 2018 priced below $750,000. But Altus Group notes that single-family inventory levels rose slowly and steadily throughout 2018 and rose above the 5,000-unit mark by late 2018, the first time this has been the case for the GTA since way back in June 2015.
What’s more, in a bid to compensate for the dip in demand that followed the federal government’s introduction of new more stringent mortgage rules last year, lowrise homebuilders have been offering a range of purchase incentives, including sharpen prices, décor dollar credits, and designer upgrades.
Lowrise homes are still priced well above the average condo and many still won’t be able to afford to purchase that category of housing. However, townhouses, which offer a more reasonable price point than detached homes, and more space than condos to accommodate growing families, could represent the best of both worlds. Townhouses generally cost less to purchase than detached houses, and they typically tend to appreciate in value faster than condos, at least in the early years.
Whether it’s a single-family home or a townhouse, if you wanted to get into the GTA lowrise home market, it would appear that there’s no time like the present.
Debbie Cosic, CEO and founder of In2ition Realty, has worked in all facets of the real estate industry for over 25 years. In2ition.ca