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New home sales in GTA reach 4-year low in 2022

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The Building Industry and Land Development Association (BILD) announced today that the Greater Toronto Area (GTA) saw the lowest level of new home sales since 2018 in 2022. 

According to the company’s source for market intelligence, Altus Group, there were 25,400 new homes sold in the GTA in 2022, which is 29 per cent below the 10-year average.

 

Condo and single-family home sales below average 

 

Sales of condos, including units in low, medium and high-rise buildings, stacked townhouses and loft units, were 20,917 units sold in 2022, which is 12 per cent below the 10-year average. 

Single-family homes, including detached, linked, and semi-detached houses and townhouses (excluding stacked townhouses), accounted for 4,483 new home sales in 2022, which is 64 per cent below the 10-year average.

 

Prices stabilized in December after months of declines

 

The benchmark price for new condos rose in December compared to the previous month, after five months of declining prices, to $1,131,614, which was down 2.8 per cent over the last 12 months. 

The benchmark price for new single-family homes also rose month-over-month in December, after four months of declining prices, to $1,753,356, which was down 4.2 per cent over the last 12 months.

 

Low inventory

 

With few new projects opening in December, as is typical for the month, the total new home remaining inventory decreased in December compared to November to 13,320 units. 

This included 11,590 condominium apartment units and 1,730 single-family units, representing 6.6 months and 4.6 months of inventory, respectively, based on average sales for the last 12 months.

A balanced market would have 9-12 months of inventory.

 

High-interest rates and tightening monetary policy

 

According to BILD President & CEO Dave Wilkes, the hesitation new home buyers showed in the latter half of 2022 was largely the result of continued high-interest rates and tightening monetary policy. 

He adds that with interest rates at the top of the cycle, the further two per cent imposed by the minimum qualifying rate will almost certainly prove to be an insurmountable hurdle for thousands of new home buyers trying to finalize financing this spring. 

Wilkes is calling on the federal government to reconsider its approach to monetary policy so families can purchase the homes they need without artificial obstacles.

 


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