New home sales in Toronto hit record low in Q3

Sales of new homes in the GTA saw a modest increase in September, but year-to-date figures are still the lowest in 10 years, the Building Industry and Land Development Association says.

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Total new home sales in September were up 4% over September 2012, for a total of 19,327 sales so far this year. That’s 44% below the 10-year average, according to data from RealNet Canada Inc., which provides housing date to BILD. And at the end of Q3 sales of new single, semi and town homes sit at 63% below the 10-year average.

There’s much less land in supply for housing, resulting in near record-low inventories and near record-high pricing. This is contributing to the decline in sales, says BILD.

“Constrained land supply has caused land prices to increase dramatically over the past decade, particularly in the low- and medium-density sectors where it has grown as much as 237%,” said BILD President and CEO Bryan Tuckey. “The economic effects will likely be felt within a few years.”

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The RealNet New Home Price Index showed a 6% price increase in the low-rise sector over September 2012, bringing the price to $658,869. The price per square foot in the high-rise sector grew modestly, but unit pricing declined by 1% to $432,853 as unit size decreased by 2%.

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Click here to see a video analysis of September home sales.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.