I find myself saying “what a difference a year makes” when I open the monthly email from RealNet containing the new home sales data for the past month. Last week, I got the numbers for April revealing a continuation of the very strong market pace set during the first quarter of the year.
According to RealNet Canada Inc., BILD’s official, independent source of new home market information, there were a total of 3,196 new homes and condos sold in the GTA in April 2010, up 64 per cent over April 2009 — yes, what a difference a year makes.
The 64 per cent increase in sales in April was made up of a modest 23 per cent in sales of low-rise (single-detached, semi-detached, townhomes) product in the 905 regions and a whopping 164 per cent increase in high-rise sales, primarily in the City of Toronto.
Through the first four months of this year, total new home sales are up 163 per cent.
In my view, new home buyers are continuing to respond enthusiastically to new project openings and remain intent on beating factors such as steadily rising prices, higher mortgage rates, the HST and the new mortgage financing rules which took effect April 19.
Taking a closer look at the price trend, RealNet reveals that over the last 12 months, the index price for high-rise condo suites has risen from $400,012 to $425,120, representing a 6.3 percentage point increase. Meanwhile, the index price for new low-rise homes jumped by $49,686 or 11.3 per cent, from $439,596 to $489,282.
What’s behind the increase in new house prices? In the low-rise sector, the answer is crystal clear. If you added-up all the unsold low-rise homes in all the low-rise projects builders currently have on the market in the GTA, you’d find less than a six months supply of housing at current sales rates.
The inventory of high-rise units available for sale is much healthier than in the low-rise sector, but far from excessive, which is why prices continue to rise, albeit more modestly.
– Stephen Dupuis is president and CEO of the Building Industry and Land Development Association (BILD). He can be reached at firstname.lastname@example.org.