Ontario Construction News staff writer
According to a recent report for the Building Industry and Land Development Association (BILD), the total number of new home sales in March 2024 was 1,125, which was a 16% decrease when compared to the same month in 2023.
“GTA new homes sales for March came in at a record low as buyers remained on the sidelines,” Edward Jegg, research manager with Altus Group, said in a statement last Tuesday (April 23). “Builders have responded with fewer new launches until sales begin to recover.”
The number of new home sales in March 2024 was 1,125, which was a 16% decrease when compared to the same month in 2023. This is the third consecutive month that the total number of new home sales remained at record lows.
“While the current situation is very beneficial for prospective new home buyers, it is a period of increased jeopardy for builders and developers that is becoming more critical with every passing day,” said Justin Sherwood, senior vice-president communications and stakeholder relations at BILD. “At the very time when builders should be ramping up production, they cannot due to a combination of high interest rates, elevated construction costs and slow demand. This is becoming a very concerning situation and persistence of these market conditions risks future housing supply.
The report further stated that the total number of condominium apartments that were sold in March 2024 was 601, which was a 38% decrease when compared to March 2023 and a 73% decrease when compared to the 10-year average. The number of single-family homes that were sold in March 2024 was 524, which was an increase of 38% when compared to March 2023 and a 51% decrease when compared to the 10-year average.
The total number of new homes that remained on inventory in March 2024 was 19,508 units, which is one of the highest inventory levels in the last decade. It includes 16,318 condominium apartment units and 3,190 single-family dwellings. This inventory level is further aggravated by the fact that the benchmark prices for new homes have been declining since the peak of 2022, indicating that buyers may be getting some relief now.
The low interest rates that are expected to continue on the horizon could further entice home buyers to purchase a pre-construction home today. This could help them lock in a lower price now and benefit from the historically low interest rates. However, the BILD report noted that the current situation poses a significant risk to developers and builders, with escalating interest rates, elevated construction costs, and slow demand.
The downward trend in home sales and the rise in interest rates are likely to continue in the coming months, making it a challenging time for buyers and developers. The BILD report recommends that both buyers and developers be aware of the latest trends in the housing market and work together to find a sustainable solution.