Toronto home sales are tanking and experts are very worried
After over a decade of sustained demand and frenzied housing price growth in the Greater Toronto Area (GTA), experts are signalling alarm bells as buyers recoil from the market in the face of historic inflation.
The region's housing market cooled noticeably in September, according to the latest Building Industry and Land Development Association (BILD) market report, warning that home sales in the GTA plummeted far below the previous September and the ten-year average last month.
BILD reports a staggeringly low 289 condominium units sold in September, representing an 89 per cent slide from the previous year and 84 per cent below the ten-year average.
And it was even more troubling in the single-family home market, where just 45 units were sold for a shocking 96 per cent drop from both last September and the ten-year average.
These declines appear to have experts on edge, with Dave Wilkes, BILD President & CEO raising alarm bells saying that "Monetary policy and rising interest rates have stalled the market."
But these conditions haven’t necessarily stalled price growth, as the benchmark price for new condominium apartments in September was $1,159,455, represeinting an 11.8 per cent spike. During the same period, the benchmark price of a new single-family home increased by a whopping 17.8 per cent.
Wilkes states that "inflation in construction and labour costs, elevating government fees, taxes and charges and tight supply make significant price correction for new homes very unlikely," and suggests that the "solution to this issue in significantly adding supply to the market and this requires a wholesale change to the way we regulate, tax and deliver new homes to the residents of the GTA."
Housing inventory remained low in September, though the available stock of new homes actually increased slightly to 11,900 units. This new inventory largely takes the form of condos, with 10,291 condominium apartment units and just 1,609 single-family lots on the market last month.
BILD says that these figures represent just a few months of inventory, with 4.4 months of condo supply and 3.1 months of single-family home supply, while a balanced housing market would have between nine and 12 months of inventory.
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