‘A stark picture:’ GTA home sales in August hit historic low, new report finds

September 19, 2024 Canuck

A homebuilding industry association says new home sales in August were at a historic low in the GTA with the data painting a “stark picture of a housing market that is struggling with deep structural issues.”

The Building Industry and Land Development Association issued a report on Thursday, saying there were 464 new home sales in August. That represents a 46 per cent decline from August 2023 and is 73 per cent below the 10-year average, according to the association’s home market intelligence source Altus Group.

It also comes on the heels of a similar decline in July when new home sales were down 48 per cent from the same month in 2023 and 70 per cent below the 10-year average.

“August new home sales across the GTA continued to be weak, leading to elevated inventory levels,” Edward Jegg, research manager with Altus Group, said in a news release Thursday.

“With most new homes taking months to construct, buyers can take advantage of current pricing and the future prospects for affordability improvements arising from mortgage rate declines that are expected to fall even further and the changes to mortgage rules set to come into effect later this year.”

The report found that condominium apartments, including units in low, medium and high-rise buildings, stacked townhouses and loft units, accounted for 235 units sold in August, down 61 per cent from August 2023 and 81 per cent below the 10-year average.

It also found that there were 229 single-family home sales in August, down 14 per cent from August 2023 but 56 per cent below the 10-year average. Single-family homes include detached, linked and semi-detached houses and townhouses.

The association said in the news release that they recorded a high inventory level not due to new inventory coming to market, but rather due to low sales, which is causing an “unhealthy situation.”

The total remaining inventory of new homes in August decreased compared to the previous month to 21,296 units, which includes 17,233 condominium apartment units and 4,063 single-family dwellings. This represents a combined inventory level of 14.5 months, based on average sales for the last 12 months.

“This is a high inventory level, maintaining the trend seen since autumn 2023 of remaining inventory levels near or just above the 20,000-unit mark. Months of inventory are staying high not because the number of new units coming to market is dramatically increasing, but rather because sales are continually decreasing,” they stated. “This is an unhealthy situation, because as interest rates decrease, sales will return but it will take longer for new building to recover, setting up a future supply/demand imbalance.”

Justin Sherwood, senior vice president of communications and stakeholder relations at the association, said the numbers present a stark picture of a housing market, adding that all levels of government need to come together to work on the issue.

“August’s new home sales data paints a stark picture of a housing market that is struggling with deep structural issues that have made the cost to build too high,” he said. “A key component of those costs are the excessively high government taxes and fees, which add, on average, $355,000 to the cost of an average single family new home in the GTA. The crisis is real and will be reflected – in the next several years by – fewer jobs, fewer new homes and compounded affordability challenges.”

“We are calling on municipalities across the GTA, supported by the provincial and federal governments to take immediate steps to address the fundamental challenges facing our industry by controlling and lowering the charges on new home construction.”

The association said benchmark prices decreased in August for both single-family homes and for condominium apartments compared to 2024. The benchmark price for new condominium apartments was $ 1,031,356, which was down six per cent over the last 12 months. The benchmark price for new single-family homes was $1,598,852, which was down five per cent over the last 12 months.

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