Market Watch through a different Lens
Wednesday May 06th, 2020Share
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Greater Toronto new home sales were busy last month, but are expected to slow. Altus Group data shows new home sales nearly doubled last year’s volume in March. The rise in sales was met with no new project launches, causing inventory to tighten. Many buyers shrugged off the pandemic, but the firm’s analysts expect the enthusiasm to fall off in the following months.
Condo Prices Rise Over 25%, Detached Prices Flat
Greater Toronto new home buyers were pushing prices higher in March. The new condo apartment benchmark price reached $983,133 in March, up 25.9% from last year. The single-family benchmark hit $1,115,869, down 0.1% from last year. Condo apartment prices were printing new all-time highs in the month. Detached prices are still about 10% lower than they were at peak.
Greater Toronto New Home Sales Rise 67%
Greater Toronto new home sales were much higher than they have been in the past few years. There were a total of 3,780 new homes sold in March, up 67% from last year. Condo apartments represent 2,840 of the units sold, up 108% from last year. Single-family sales represent the other 890 units sold, up 2.4% from last year. It’s a huge improvement, but as we can see the past two years were slow relative to regular volumes. The past 3 Marches all have volumes rarely seen outside of a recession.
New Home Sales In The City Almost Doubled
The City of Toronto took the lead from York Region, as the busiest new home sale region in the GTA. The City represented 1,870 of the new home sales, up 96% from last year. Breaking it down, 1,848 of those sales were condo apartments, up 112% from last year. Single-family homes were the other 22 sales, down 73% from last year.
No New Project Launches In Greater Toronto
Greater Toronto new home inventory dropped significantly last month. There were 13,933 new homes for sale in March, down 18.98% from a month before. This represents a decline of 17.05% from last year. While inventory dropped quickly, it’s important to note part of the reason is due to a lack of new projects. No new projects launched in the month – and in fact, some projects were cancelled or delayed.
Sales To Active Listings Ratio Increases
The drop to inventory and climb in sales, pushed the sales to active listings ratio (SALR) higher. The ratio reached 26.77% in March, compared to 13.30% from last year. Generally, analysts expect prices to rise when the ratio is above 20%. Prices are expected to fall when the ratio falls below 12%. When the ratio is between 12% and 20%, the market is considered to be priced right for demand during the period.
Greater Toronto’s new home buyers weren’t (yet?) deterred by the pandemic in March. Altus Group did add they expect things to cool down in April. This is partially due to a near shutdown of the economy, as well as rapidly changing fundamentals. However, amidst early pandemic warnings, buyers were more concerned about FOMO than the pandemic.
(source: Altus Group)