Low-rise housing sales hit record low

Sales of new detached and semi-detached homes dipped this past March, says the Building Industry and Land Development Association.

It adds prices of the units climbed 11% despite the fact that only 973 low-rise homes were sold in the GTA in March, down 47% from last year.

Constrained land supply and an outdated approvals process are two of the factors negatively affecting the low-rise housing market. Supply is low and prices are creeping higher.

Read: Get clients to pay off mortgages faster

“Housing affordability poses significant challenges for the industry, new homebuyers and everyone living in the GTA,” Tuckey adds.

The current price gap between low-rise and high-rise homes has increased to a record $207,000, nearly tripling in the last four years. In contrast, high-rise prices have stabilized due to shrinking unit sizes, only increasing 3% over March 2012.

High-rise sector sales hit 1,120 across the GTA, bringing total new home sales to 2,093 last month.

“BILD has been monitoring the effects of last July’s federal government changes to mortgage rules for many months and we believe it has adversely affected consumer confidence and held many first-time buyers out of the market,” says BILD President and CEO Bryan Tuckey.

Read: Consumer confidence sinks

Earlier this month, CIBC economist Benjamin Tal said, “If you look at the overall situation, I think Finance must be pleased by what they’re seeing. They don’t see the slowdown as excessive, I think it’s exactly what they had in mind.”

Read: Fewer Canadians will buy homes

Staff

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