New home sales low

Reduced affordability in Toronto’s new homes market continues to impair sales, says the Building Industry and Land Development Association.

According to RealNet Canada, the more than 2,000 new home sales last month amounted to the lowest May on record. The decline was mainly driven by the low-rise market, which dropped to 33% below the 10-year average.

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This is also caused by constrained land supply, as well as by rising government fees and charges. On average, government fees and charges amount to more than one-fifth of the cost of a new home, finds a new study.

“The issue of home affordability poses a significant challenge for new home buyers in the GTA,” says BILD president and CEO Bryan Tuckey. “Government fees and charges continue to increase across the region, making it increasingly difficult for our industry to build affordable, safe, complete communities for the 100,000 people and 50,000 jobs that come to the GTA every year.”

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Land supply for ground-related housing has also affected pricing with low-rise inventory levels at record-low levels, down 46% since 2009.

The RealNet New Home Price Index showed a 6% increase in the low-rise sector over May 2012, bringing the price to record-breaking $644,427.

Pricing for high-rise homes has remained relatively stable for several months, declining by 2% to 431,955.

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Staff

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