Greater Toronto new home sales are rising, but so is inventory as well. Altus Group data shows inventory reached a multi-year high in October. The rise in inventory was accompanied by higher sales too – just not in the City of Toronto. In the City proper, sales continue to make significant declines.
Greater Toronto New House Prices Fall, Condos Rise Even More
Greater Toronto new home prices are still heading in opposite directions. The benchmark price for new single-family homes was $1,074,791 in October, down 3.6% from last year. Condo apartments went higher to $833,827 in October, up 7.5% from last year. Single-family declines are getting larger, while condo price growth is accelerating.
Greater Toronto Sales Has A Massive Revision From Last Year
Sales of new homes in Greater Toronto are having a big month, compared to last year. There were 4,720 sales in October, up 17.88% from last year. It’s a large increase, but it’s also down 14.00% compared to sales in 2017. Better than last year, but also not quite at the boom-time levels of 2017.
Greater Toronto New Home Sales
Total October new home sales in Greater Toronto.
Source: Altus Group, Better Dwelling.
Breaking down the numbers, single-family homes are what’s moving, while condos drop. Sales of condo apartments totaled 3,424 sales in October, down 3.22% from a year ago. Single-family homes reached 1,296 sales, an increase of 178.11% from a year before. The market for new single-family homes was unusually slow last year, if you didn’t notice.
An important note on the revision of last year’s monthly sales, which was obscenely large. Last October’s sales were revised to be 21.48% higher than it was the year before. Revisions are typical, but they’re more in the 1-3% range. This isn’t typical of data from Altus , from what we’ve seen. This particular revision could have had a big impact, since it was widely reported.
New Home Sales In Toronto Fall Over 40%
The City of Toronto seems to be exempt from this new home sales bump. There were only 1,754 new home sales in October, down 40.70% from last year. This is also less than half of the sales in October 2017. Breaking it down, condo apartments are where the slowdown is, with 1,734 sales, down 39.97% from last year. Single-family sales represent just 20 of the sales, down 71.01% from last year. Condos are the vast majority of the new home market in Toronto.
Greater Toronto New Home Sales
Total new home sales in Greater Toronto for October, by region.
Source: Altus Group, Better Dwelling.
Greater Toronto New Home Inventory Rises To The Highest Level In Years
Inventory for new homes in Greater Toronto is launching into the stratosphere. There were 19,718 new homes for sale in October, up 5.19% from last year. For context, this is 21.09% higher than October 2017, when it was considered a the tight market. This is the most October inventory since the condo glut of 2015.
Greater Toronto New Home Absorption Is Getting Weaker
Inventory is building faster than sales are rising, and it’s causing the sales to active listing ratio (SALR) to fall. The SALR fell to 23.94% in October, down from 24.59% the year before. This is weaker market demand, but buyers are split on how they feel on this one. Generally speaking, the market is a buyer’s market below 12%, and prices are expected to fall. Above 20% is a seller’s market, and prices are expected to rise. In between 12% and 20% is balanced, and the market is priced just right. Of course, the indicator needs to stay within range to take effect – if it does at all.
Greater Toronto New Home Sales To Active
The ratio of sales to active listings for new homes in Greater Toronto, for the month of October.
Source: Altus Group, Better Dwelling.
Greater Toronto sales are up a lot, but so is inventory. The rise in sales is entirely in the 905, especially in the low rise segments. In the City of Toronto, sales are falling significantly – for a second year in a row. This would have relieved pressure on prices to move higher, if the government wasn’t promising to inject more cash. Instead, buyer expectations have been set to expect rising prices.
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