A record-low number of new low-rise homes in Toronto is behind correspondingly record-breaking highs in condo sales for the month of February, according to the latest data from the Building Industry and Land Development Association.
A decade ago, there were 12,064 new detached homes available from Toronto builders. Flash forward to 2017, and that number has dried up to a shocking record low of just 324. Across the entire GTA, there were just 1,001 new low-rise homes available, compared to 17,304 in February 2007. The average price of all single-family homes – which includes detached, semi-detached, and townhomes – has risen to a record $1,081,013, with the average price of detached homes now sitting at $1,469,449, according to Altus Group.
"If I were shopping for a single-family home 10 years ago, I would have been able to choose from among 500 different sites and nearly 18,000 units," said Patricia Arsenault, Altus Group's executive vice-president of research consulting services. "Today there are less than 100 projects with any available units to purchase, totaling only about 1,000 units. And I would have to act very quickly to get one of those."
Between the record-high prices and the unprecedented scarcity of low-rise homes, the average price of new condos in stacked townhomes and mid- and high-rise buildings is up as well, rising in February to an average of $523,086 from $507,511 the previous month. And units are not only getting pricier but also shrinking in size. The average price per square foot hit a record $652 in February, and the average condo size dropped to 802 square feet.
Overall GTA condo sales in February grew by 79 per cent to 3,542 over the same time last year, which was more than double the total of 1,541 new single-family homes sold.
Sounding the alarm
Bryan Tuckey, BILD's president and CEO, knows the score.
"February data demonstrates, quite clearly, that our housing supply crisis in the GTA is getting worse," he said. "Our members are building to current provincial intensification policy, and we are building less low-rise single-family housing and more high and mid-rise housing. But consumer demand for low-rise homes has not dropped."
It isn't just the supply of single-family homes that's drying up either – the number of available condos in February fell to a new record low of 10,342.
"Today in the GTA we have a scarcity of single-family, ground-related housing that's not just unprecedented – it's almost inconceivable," Tuckey said. "As a result we're seeing record-breaking condo sales and continued price growth."
Tuckey might be biased, but he's also not being coy about wanting to see the city's infamously knotted red tape loosened to get more new building projects approved in Toronto. He says the numbers speak for themselves.
"As the current data demonstrates, legislative guidelines and planning policies have real impacts on real people," Tuckey said. "With significant declines in builder inventory and record prices for both low and high-rise homes, the GTA housing market is in crisis, and it's time for governments to work with us to address the problems."
Federal budget implications
Meanwhile, Toronto Mayor John Tory was pleased, though not thrilled, with the federal government's new budget, which has earmarked $11.2 billion toward the creation of more affordable housing across the country – up from $2.3 billion in last year's budget. Tory had originally asked for a pledge of $12.6 billion over eight years, since Toronto Community Housing is staring at a bill of $2.3 billion in repairs alone over the next 10 years. The mayor also used the opportunity of the new federal budget to call for more spending at the provincial level.
“The government of Canada has embraced its role in helping to build up the city of Toronto," Tory said. "It’s now time for the province to come to the table and make it clear that they too will fund these vital Toronto priorities.”