Every asset class posted weaker performance compared to long-term trends despite sharp annual increases in activity
New home sales in the Greater Toronto Area (GTA) saw a marked slowdown in June, with activity levels significantly below the region’s 10-year average, according to Altus Group and the Building Industry and Land Development Association.
A total of 2,526 new home sales transpired in the GTA last month, hovering 30% lower than the 10-year average for June despite representing a 32% annual increase.
Condo apartments accounted for the vast majority of this sales volume, with 1,957 units sold in June. This level was 11% higher annually, although still 21% below the 10-year average. Single-family home sales totalled 569 last month, surging by 256% year over year but remaining 49% lower than the 10-year average.
“New home sales took a step back in June,” said Edward Jegg, research manager at Altus Group. “Increased supply eased pressure on prices but buyer hesitancy has returned.”
The Canadian Real Estate Association (CREA) has downgraded its home sales forecast for this year and 2024 as higher interest rates bite and would-be buyers step to the sidelines.https://t.co/Hgiyj4Yyci#breakingnews #mortgageindustry #homesales #interestrates #realestate
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 14, 2023
Dave Wilkes, president and CEO of BILD, said that the impact of higher lending costs on home-buying intentions should not be underestimated.
“There is no doubt that the recent escalation in interest rates is pushing some prospective new home buyers to the sidelines,” Wilkes said. “Rising interest rates also delay the addition of much-needed supply to the market, because pre-construction sales are a crucial element in financing new housing.”
“When the Bank of Canada continually raises interest rates, it is exacerbating Canada’s housing supply and affordability crisis.”
The GTA’s remaining inventory ticked up to 16,379 units in June. Meanwhile, the benchmark price for new condo apartments fell by 8.4% annually to around $1.09 million, and the benchmark price for new single-family homes dropped by 6.9% during the same period to $1.716 million.
