Entry of fresh inventory has been disrupted by the pandemic’s impact, especially material shortages
Demand for new homes in the Greater Toronto Area remains strong, although ensuring that the market has enough supply continues to be a significant challenge given the impact of the COVID-19 pandemic and materials shortages, according to Altus Group data gathered for the Building Industry and Land Development Association.
The region saw 3,240 new homes sold in February, which was 9% higher than the market’s 10-year average for that month despite being 34% lower year over year.
Single-family sales totalled 1,617 transactions, down 30% from last year but 20% higher than the 10-year average. Condos accounted for 1,623 sales last month, down 38% year over year and holding parity with the 10-year average.
“Sales in the new condominium apartment sector in the GTA returned to a more typical level in February,” said Ryan Wyse of Altus Group. “With additional new supply on the horizon, the spring market will likely yield its usual increase in activity; however, economic challenges related to the pandemic remain and will continue to provide some obstacles in the near term.”
Remaining inventory, which includes pre-construction and under-construction units, fell on a monthly basis to end up at 12,095 units, its lowest level since December 2017.
The benchmark price for new single-family homes in February grew by 25.1% annually to reach $1.373 million, while the benchmark value of new condo apartments had an 8.4% gain to $1.042 million.
“We need to be careful when comparing February of this year to the exceptionally busy month of February 2020, just before the pandemic hit,” said Dave Wilkes, president and CEO of BILD. “We are talking about completely different sets of circumstances. The fact is that February 2021 was a solid month when compared with the 10-year average.”