Greater Toronto real estate demand continues to collapse and new homes are not immune. BILD and Altus Group data reveals new home prices climbed in June, with both single-family homes and condo apartments seeing an increase. The move was somewhat unusual considering it was the weakest sales on record for the month, combined with the highest level of inventory.
Greater Toronto New Home Prices Climb Despite Soft Demand
Source: Altus Group.
Toronto new home prices are diverging by segment. A typical single-family home—including detached, semi, and row homes—saw the benchmark price climb 0.3% to $1.51 million in June, but remains 6.4% lower than last year. Annual declines are smaller than the 6.6% reported in May, but may be noise given the lack of sales.
Meanwhile, condo apartment prices made a substantial increase of 0.7% to $1.03 million in June. This brings prices 0.5% higher than last year, indicating the monthly increase is enough to bring growth back above zero. Rising prices and falling sales don’t hold much weight with sales volume remaining this low, suggesting buyers are not willing to transact at these prices.
However, this may be a sign of the increased mortgage leverage granted to investors by recent mortgage changes. The Bank of Canada (BoC) previously warned policymakers against tinkering with the mortgage market, arguing the changes can increase prices without demand. Shocking, we know.
Greater Toronto June New Home Sales Fall To Historic Low
Greater Toronto new home sales historically have been strong in June, but that wasn’t the case this year. There were just 510 new homes sold last month, down 60% from last year’s already unusually weak volumes. For context, this is 82% below the 10-year average, and marks the weakest June new home sales in the available records going back a generation. It’s highly unusual for the volume to even fall below 4-digit sales outside of winter.
Breaking that volume down, only 293 single-family homes were sold in June, down 53% from last year and 62% below the 10-year average for the month. The remaining 217 units were condo apartments, down 67% from last year and 89% below the 10-year average.
Virtually all demand is now in the 905-region, with the City’s developers only selling 69 homes (nice!) last month, down 63% from last year and 88% lower than June 2023, and both periods were considered unusually slow for Toronto. Just 2 single-family units were sold last month.
Greater Toronto New Home Inventory Surges, Most On Record
Greater Toronto new home sales typically show weak sales due to a lack of inventory. If there’s no new homes for sale, it’s hard to hit higher volumes. That’s not the case here, with a mind-blowing 22,254 units available in June, up 5.2% from last year. This is the most inventory seen for the month going back at least two decades. Fewer sales and more listings are creating an epic supply imbalance—going the other way.
Months of inventory (MOI) are how many months the current inventory would last if no new homes were added. The MOI hit 43 months in June, meaning not one single unit would need to be added for the next 3 years… and then another 7 months of inventory would remain, leaving it in a buyer’s market. BILD prefers to use a 12-month average of sales, coincidentally boosting volume by including pre-2025 periods. Using this average, they report 19 months—“the highest inventory to date.”
A balanced market is generally between 4-6 months of inventory, with anything above considered a buyers market. When this occurs, analysts generally expect home prices to fall. According to legend, if you listen closely in Toronto, the faint voice of someone can be heard saying “there’s plenty of demand—we just have ten balanced markets.”
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